Dollar General 2007 Annual Report Download - page 5

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Kohlberg Kravis Roberts & Co., L.P. (“KKR” or “Sponsor”). KKR, GS Capital Partners VI
Fund, L.P. and affiliated funds (affiliates of Goldman, Sachs & Co.), Citi Private Equity,
Wellington Management Company, LLP, CPP Investment Board (USRE II) Inc., and other
equity co-investors (collectively, the “Investors”) indirectly own a substantial portion of our
capital stock through their investment in Parent.
The Merger consideration was funded through the use of our available cash, cash equity
contributions from the Investors, equity contributions of certain members of our management
and the debt financings discussed below. Our outstanding common stock is now owned by
Parent and certain members of management. Our common stock is no longer registered with the
Securities and Exchange Commission (“SEC”) and is no longer traded on a national securities
exchange.
We entered into the following debt financings in conjunction with the Merger:
• We entered into a credit agreement and related security and other agreements
consisting of a $2.3 billion senior secured term loan facility, which matures on July 6,
2014 (the “Term Loan Facility”).
• We entered into a credit agreement and related security and other agreements
consisting of a senior secured asset-based revolving credit facility of up to
$1.125 billion (of which $432.3 million was drawn at closing and $132.3 million was
paid down on the same day), subject to borrowing base availability, which matures
July 6, 2013 (the “ABL Facility” and, with the Term Loan Facility, the “New Credit
Facilities”).
• We issued $1.175 billion aggregate principal amount of 10.625% senior notes due
2015, which mature on July 15, 2015, and $725 million aggregate principal amount of
11.875%/12.625% senior subordinated toggle notes due 2017, which mature on
July 15, 2017. We repurchased $25 million of the 11.875%/12.625% senior
subordinated toggle notes due 2017 in the fourth quarter of fiscal 2007.
Overall Business Strategy
Our mission is “Serving Others.” To carry out this mission, we have developed a business
strategy of providing our customers with a focused assortment of everyday low priced
merchandise in a convenient, small-store format.
Our Customers. In general, we locate our stores and base our merchandise selection on
the needs of households seeking value and convenience, with an emphasis on rural and small
markets. However, much of our merchandise, intended to serve the basic consumable,
household, apparel and seasonal needs of these targeted customers, also appeals to a much
broader and higher income customer base.
Our Stores. The traditional Dollar General® store has, on average, approximately 6,900
square feet of selling space and generally serves customers who live within five miles of the