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By D. Gail Fleenor
Susser Holdings Corp., headquartered in Corpus Christi, Texas, operates the 330-unit Stripes convenience store chain, and signed agreements in September to acquire the parent company of the 168-unit Town & Country Food Store chain, based in San Angelo, Texas for $361 million in cash.
"Town and Country Food Stores cover a contiguous market, have a high-quality store base with a very people-driven culture and great management," E.V. "Chip" Bonner, Susser Holdings' executive vice president/general counsel told CSNews Online. "This acquisition enhances Susser's growth prospects, gives us geographical diversification, and adds significant scale to our store base and operations. It also was an attractive evaluation from our standpoint." While Susser's acquisition of Town & Country Food Stores took some industry watchers by surprise, it was a move that Susser had considered for several years.
Devin Bates, Town & Country Food Stores' CFO and CIO, told CSNews Online that his company was not searching for a purchaser prior to the Susser offer. "We had been looking for ways to recapitalize the company and in no way intended for a sale to be the way to get that done," he said. "As we were looking at different options, Sam Susser came to us with a completely unsolicited offer and it was enough of an offer to be serious. This started in June. We pursued it and worked through the diligence issues during the summer."
Both Susser Holdings and Town & Country Food Stores are experiencing strong growth, Bonner said, pointing to the companies' service areas as one reason. "We are in a very, very fast growing area of Texas. The Rio Grande valley is expanding rapidly," he said. "Town & Country also has experienced a lot of growth in their area because of oil and gas activity in West Texas." Town & Country also operates stores in New Mexico, another new territory for Susser.
While changes are always expected with an acquisition, Bonner stated emphatically that Susser does not plan layoffs at store level or at the store supervisor level. "There may be some consolidation at the corporate level as it deals with the functionaries of information technology (IT) and finance. We don't know exactly where that will be, but this will be something that will be reviewed by our merger integration committee," he said. "The committee will look at best practices with both companies and make recommendations as to how we move forward."
It is anticipated that Devin Bates will head information technology for Susser, according to both Bonner and Bates. "It is Devin's and our shared expectation that at the date of closing he would become senior vice president and CIO of Susser Holdings and a member of the senior management team," Bonner said.
One difference between the two companies may prompt future changes: branded vs. unbranded fuel. "Susser Holdings carries all the fuel brands that Town & Country carries in its wholesale division," said Bonner. "On the retail side of the business, we sell branded gasoline under the Valero flag, whereas they are predominantly selling unbranded gasoline under the Town & Country flag. We will evaluate strategic fuel supply over the next six months to a year and make a decision on what's best for the company overall."
There are no overlapping stores or areas with the purchase and no acquisition-related closings of Town & Country stores are scheduled, Bonner said. "Town & Country and Susser both look at our store bases every year to make decisions about closures. They may have one or two stores that may close in the next couple of years; likewise we will have the same." Performance will be the determining factor in closings. "We always look at culling the low performers and building bigger boxes to replace older, smaller stores."
Additionally, changes in the area of foodservice may be in the offing. "We have no plans to close or do away with the Country Cooking concept. It works very well in west Texas. We think there will be opportunities to look at expanding our Laredo Taco Co. brand into that area in addition to Country Cooking or look at some menu expansion that involves both companies' products."
Town & Country’s proprietary brand, Country Cooking, is offered in about two-thirds of its stores, while Susser's brand is offered in 47 percent of its units.
"There will be a period of time when we get together and look at what the two companies are doing and look for best practices," Bates noted. "We both are strong organizations that do a lot of things well, but neither of us thinks we do everything perfect. It's going to be a good process for both companies to choose what we believe is the best way to approach different business issues."
Bonner sees an exciting future for the expanded company. “We are very excited about the opportunity, getting to know their people better, getting the transaction closed and getting it integrated.”