Dollar General 2007 Annual Report Download - page 76
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74
Reclassifications
Certain reclassifications of the 2006 amounts have been made to conform to the 2007
presentation.
2. Merger
On March 11, 2007, the Company entered into an Agreement and Plan of Merger (the
“Merger Agreement”) with Buck Holdings L.P., a Delaware limited partnership (“Parent”), and
Buck, a Tennessee corporation and wholly owned subsidiary of Parent. Parent is and Buck was
(prior to the Merger) controlled by investment funds affiliated with Kohlberg Kravis Roberts &
Co., L.P. (“KKR”). On July 6, 2007, the transaction was consummated through a merger (the
“Merger”) of Buck with and into the Company. The Company survived the Merger as a
subsidiary of Parent. The Company’ s results of operations after July 6, 2007 include the effects
of the Merger.
The aggregate purchase price was approximately $7.1 billion, including direct costs of
the Merger, and was funded primarily through debt financings as described more fully below in
Note 6 and cash equity contributions from 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”) of approximately $2.8 billion (553.4 million shares of
new common stock, $0.50 par value per share, valued at $5.00 per share). Also in connection
with the Merger, certain of the Company’ s management employees invested, and were issued
new shares representing less than 1% of the outstanding shares, in the Company. Pursuant to the
terms of the Merger Agreement, the former holders of the Company’ s common stock, par value
$0.50 per share, received $22.00 per share, or approximately $6.9 billion, and all such shares
were acquired as a result of the Merger. As of February 1, 2008, there were approximately
555,481,897 shares of Company common stock outstanding, a portion of which is redeemable as
further discussed below in Note 9.
As discussed in Note 1, the Merger was accounted for as a reverse acquisition in
accordance with the purchase accounting provisions of SFAS 141, “Business Combinations”.
Because of this accounting treatment, the Company’ s assets and liabilities have properly been
accounted for at their estimated fair values as of the Merger date. The aggregate purchase price
has been allocated to the tangible and intangible assets acquired and liabilities assumed based
upon an assessment of their relative fair values as of the Merger date.