Dollar General 2009 Annual Report Download - page 87

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Merger (Continued)
Merger as a subsidiary of Buck. 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 7 and cash
equity contributions from KKR, GS Capital Partners VI Fund, L.P. and affiliated funds (affiliates of
Goldman, Sachs & Co.), and other equity co-investors (collectively, the ‘‘Investors’’ of approximately
$2.8 billion (316.2 million shares of new common stock, $0.875 par value per share, valued at $8.75 per
share). Also in connection with the Merger, certain of the Company’s management employees invested
in 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 Predecessor’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 discussed in Note 1, the Merger was accounted for as a reverse acquisition in accordance with
applicable purchase accounting provisions. 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.
The allocation of the purchase price is as follows (in thousands):
Cash and cash equivalents .................................. $ 349,615
Short-term investments .................................... 30,906
Merchandise inventories ................................... 1,368,130
Income taxes receivable .................................... 40,199
Deferred income taxes .................................... 57,176
Prepaid expenses and other current assets ...................... 63,204
Property and equipment, net ................................ 1,301,119
Goodwill .............................................. 4,338,589
Intangible assets ......................................... 1,396,612
Other assets, net ......................................... 66,537
Current portion of long-term obligations ....................... (7,088)
Accounts payable ........................................ (585,518)
Accrued expenses and other ................................ (306,394)
Income taxes payable ..................................... (84)
Long-term obligations ..................................... (267,927)
Deferred income taxes .................................... (540,675)
Other liabilities .......................................... (208,710)
Total purchase price assigned ................................ $7,095,691
The purchase price allocation included approximately $4.34 billion of goodwill, none of which is
expected to be deductible for tax purposes. The goodwill balance at January 30, 2009 decreased
$6.3 million from the balance at February 1, 2008 due to an adjustment to income tax contingencies as
further discussed in Note 6.
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