Dollar General 2011 Annual Report Download - page 30

Proxy
underwriting discounts and commissions. Of such shares, affiliates of KKR and Goldman, Sachs & Co.
sold to Dollar General 2,561,745 and 1,065,912 shares for proceeds of $96.4 million and $40.1 million,
respectively. This transaction was specifically reviewed and approved by a special committee of our
Board made up entirely of independent directors.
In addition, concurrent with the closing of the April 2012 secondary offering and pursuant to a
Share Repurchase Agreement between Dollar General and Buck Holdings L.P., dated March 25, 2012,
Dollar General purchased 6,817,311 shares of Common Stock from Buck Holdings L.P. for an
aggregate purchase price of $300 million, or $44.00562 per share which represents the per share price
to the public in the secondary offering less underwriting discounts and commissions. Of such shares,
affiliates of KKR and Goldman, Sachs & Co. sold to Dollar General 3,552,787 and 1,478,274 shares for
proceeds of $156.3 million and $65.1 million, respectively. This transaction was specifically reviewed and
approved by a special committee of our Board made up entirely of independent directors.
Affiliates of KKR and Goldman, Sachs & Co. (among other entities) may be lenders under our
senior secured term loan facility, which had a $2.3 billion principal amount at inception and a principal
balance as of February 3, 2012 of approximately $1.964 billion. Goldman Sachs Credit Partners L.P. also
served as syndication agent for the term loan facility. This term loan facility was entered into in the
ordinary course of business, was made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable loans with persons not related to the lender
and did not involve more than the normal risk of collectability or present other unfavorable features.
We paid approximately $66.4 million of interest on the term loan during fiscal 2011. We recently
amended this term loan facility to, among other things, extend the maturity of a portion of such facility
from 2014 to 2017. An affiliate of each of KKR and Goldman, Sachs & Co., along with a third
unaffiliated entity, acted as a joint lead arranger for the term loan facility extension which closed on
March 30, 2012. In connection therewith, the Company paid each such affiliate an arrangement fee of
approximately $440,000.
Goldman, Sachs & Co. is a counterparty to an amortizing interest rate swap with a notional
amount totaling $116.7 million as of February 3, 2012, entered into in connection with the senior
secured term loan facility. We paid Goldman, Sachs & Co. approximately $13.9 million in fiscal 2011
pursuant to this swap.
In March 2012, we amended our senior secured asset-based revolving credit facility to, among
other things, increase the maximum total commitment to $1.2 billion. An affiliate of Goldman,
Sachs & Co. (among other entities) serves as a lender under the amended revolving credit facility. This
amended revolving credit facility was entered into in the ordinary course of business, was made on
substantially the same terms, including interest rates and collateral, as those prevailing at the time for
comparable loans with persons not related to the lender and did not involve more than the normal risk
of collectability or present other unfavorable features.
Each of KKR and Goldman, Sachs & Co., either directly or through affiliates, has ownership
interests in a broad range of companies (‘‘Portfolio Companies’’) with whom we may from time to time
enter into commercial transactions in the ordinary course of business, primarily for the purchase of
goods and services. We believe that none of our transactions or arrangements with Portfolio Companies
are significant enough to be considered material to KKR or Goldman, Sachs & Co. or to our business
or shareholders. In 2011, the largest amount paid to a Portfolio Company was approximately
$88.3 million paid to a KKR Portfolio Company in the ordinary course of business for the purchase of
merchandise for resale. This amount represented less than 2.5% of the vendor’s revenues for its last
completed fiscal year and less than 1.0% of our revenues for 2011.
Our Board members, Messrs. Calbert and Agrawal, serve as executives of KKR, while our
Board member, Mr. Jones, serves as a Managing Director of Goldman, Sachs & Co. KKR and certain
affiliates of Goldman, Sachs & Co. indirectly own, through their investment in Buck Holdings, L.P., a
substantial portion of our common stock.
22