Southeastern convenience store giant Pantry Inc.
The deal looks like a big positive for Pantry, which can now boast of increased coverage in the Southeast as well as new outlets that should significantly boost operating results down the line.
In a somewhat complicated transaction, Pantry sold and then leased back 114 Golden Gallon stores through a deal with Realty Income
Management's comments on the Golden Gallon news were predictably upbeat: The company is getting a sizable boost to revenue and expects a quick jolt to net profit even without recording any additional "synergies."
Pantry has already retrained Golden Gallon employees and folded the chain into its supplier agreements. In short, everything seems to be going smoothly -- perhaps not surprisingly given Pantry's considerable experience folding in acquired stores and chains.
(For broader context, revisit Rex Moore's recent article on 7-Eleven
Admittedly, most of the company's acquisitions haven't been on the scale of Golden Gallon. Even so, the formula appears to be working -- at least if last month's preannouncement of full-year financial results is any indication.
Indeed, while the company has taken on more debt to finance this purchase, should Pantry continue to grow effectively and efficiently, its leverage should not be a hindrance, and the company should continue to reward investors -- just as it has for the last 12 months.
Dave Marino-Nachison can be reached at firstname.lastname@example.org.