Dollar General Corporation · NYSE:DG
Dollar General — Merger or Acquisition (August 2014)
15 slides from Dollar General's merger presentation, Aug 18, 2014
Slide 1: Dollar General Proposal to Acquire Family Dollar
Dollar General Proposal to Acquire Family Dollar AUGUST 18, 2014
Slide 2: Forward-looking statements
This presentation contains forward-looking information within the meaning of the federal securities laws. A reader can identify forward-looking statements because they are not limited to historical fact or they use words such as “outlook,” “may,” “should,” “could,” “believe,” “anticipate,” “plan,” “
Slide 3: Key Transaction Highlights
Key Transaction Highlights
Slide 4: Transaction Overview
Transaction Overview CONSIDERATION VALUATION FINANCING SYNERGIES FINANCIAL IMPACT TIMING LEADERSHIP $78.50 per Family Dollar share 100% cash offer Valuation represents an LTM Q3 2014 EBITDA multiple of 11.6x Price represents a 5.4% premium to the alternative transaction and a 29.4% premium to the Ju
Slide 5: Attractive Proposal for Family Dollar Shareholders
Attractive Proposal for Family Dollar Shareholders Higher value and certainty of 100% cash offer Goldman Sachs and Citigroup Global Markets Inc. agreement to provide committed financing Extensive economic analysis completed on potential regulatory impacts Dollar General management ready to move imme
Slide 6: Solidify Position as the Leading Small-Box Discount Retailer
Solidify Position as the Leading Small-Box Discount Retailer Combined Adjusted EBITDA (LTM) (excluding synergies) STATES REVENUE (LTM) STORES 11,338 19,584 8,246 40 46 46 $ 17,793 $ 28,171 $ 10,378 $ 2,083 $ 2,917 $ 834 Note: See Non-GAAP reconciliations States and store count are as of most recent
Slide 7: Highly Complementary Business Models
Highly Complementary Business Models PRICING FORMAT PRODUCT MIX 100% Multi Price-Point Most items priced at $10 or less ~25% priced at $1 or less 100% Multi Price-Point Most items priced at $10 or less ~27% priced at $1 or less STORE SIZE ~7,400 square feet ~7,200 square feet Source: Family Dollar 2
Slide 8: Clear Operational Synergies and Integration Plan
Clear Operational Synergies and Integration Plan SIGNIFICANT OPERATIONAL SYNERGIES EXTENSIVE PLANS Detailed integration plans developed across work streams: Store Operations Merchandising Supply Chain Administration INTEGRATION COSTS $550-600 million of run-rate synergies by year 3 Approximately $30
Slide 9: Committed Management Team to Drive Integration
Committed Management Team to Drive Integration CEO Rick Dreiling committed through May 2016 Management team has led transformation and improved performance at Dollar General over the last few years Exceptional corporate culture focused on value and convenience for consumers REVENUE ADJUSTED EBITDA C
Slide 10: Significant Earnings Accretion Through Synergies
Significant Earnings Accretion Through Synergies METRIC DG LTM Combined LTM Sales $ 17,793 $28,171 Adjusted EBITDA $2,083 $2,917 Pro Forma Adjusted EBITDA (midpoint synergies)(1) -- $3,492 Low double-digit percentage accretive in year one, excluding integration and transaction costs
Slide 11: Financing and Credit Considerations
Financing and Credit Considerations Agreement by Goldman Sachs and Citi to provide committed financing, consisting of a combination of the following: Cash on balance sheet Revolver Term Loan Notes Pro forma adjusted debt to LTM EBITDAR of 5.5x Compelling long-term financial model allowing for contin
Slide 12: Key Transaction Highlights
Key Transaction Highlights
Slide 13: Non GAAP Reconciliations
Non GAAP Reconciliations Certain information provided in this presentation has not been derived in accordance with U.S. generally accepted accounting principles (“GAAP”), including Adjusted EBITDA for Dollar General’s 2008 and 2013 fiscal years and calculations of Sales and Adjusted EBITDA for both
Slide 14: Non GAAP Reconciliations
Non GAAP Reconciliations Combined Fiscal Year 13 Weeks 13 Weeks 52 Weeks Fiscal Year 39 Weeks 39 Weeks 52 Weeks Ended Ended Ended Ended Ended Ended Ended Ended Most January 31, May 3, May 2, May 2, August 31, June 1, May 31, May 31, Recent (In millions) 2014 2013 2014 2014 2013 2013 2014 2014 52 Wee
Slide 15: Non GAAP Reconciliations
Non GAAP Reconciliations January 30, January 31, (In millions) 2009 2014 Net income 108.2 $ 1,025.1 $ Add (subtract): Interest expense 388.8 89.0 Depreciation and amortization 235.1 326.7 Income taxes 86.2 603.2 EBITDA 818.3 2,044.0 Adjustments: (Gain) loss on debt retirement, net (3.8) 18.9 (Gain)