Family Dollar Stores — Merger or Acquisition (July 2014)
18 slides from Family Dollar Stores's merger presentation, Jul 28, 2014
Slide 1: Dollar Tree Acquisition of Family Dollar
Exhibit 99.2 Dollar Tree Acquisition of Family Dollar July 28, 2014
Slide 2: Safe Harbor
Safe Harbor We (Dollar Tree, Inc.) obtained or created the market and competitive position data used throughout this presentation from research, surveys or studies conducted by third parties, information provided by customers, and industry or general publications. Industry publications and surveys g
Slide 3: Additional Information
Additional Information Important Information for Investors and Shareholders This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which
Slide 4: Compelling Strategic Rationale
Compelling Strategic Rationale Creates the largest discount retailer in North America, by number of stores Complementary business models across fixed- and multi-price points Targets broader range of customers and geographies Leverages complementary merchandise expertise Generates significant synergy
Slide 5: Transaction Overview
Transaction Overview $74.50 per Family Dollar Stores, Inc. share, implying $9.2 billion enterprise value • Represents 22.8% premium to Family Dollar’s closing share price of $60.66 as of July 25, 2014 • Represents Enterprise Value / LTM EBITDA 1 excluding synergies: 11.3x • Represents Enterprise Val
Slide 6: Transaction Provides Significant Value to Family Dollar Shareholders
Transaction Provides Significant Value to Family Dollar Shareholders Transaction to deliver significant immediate value and upside to Family Dollar shareholders • 22.8% premium to Family Dollar’s closing share price of $60.66 as of July 25, 2014 1 • Represents a 5-year total shareholder return of ap
Slide 7: Dollar Tree Overview
Dollar Tree Overview Founded in 1986, IPO in 1995 US: 4,891 Store Count¹ Canada: 189 Uniquely positioned in all of retail Dollar Tree: $1 “Everything’s $1” is a true Pricing Strategy Dollar Tree Canada: CAD$1.25 differentiator in the eyes of the Deal$: Multi-price customer Variety-discretionary, sea
Slide 8: Family Dollar Overview
Family Dollar Overview Founded in 1959, IPO in 1970 Store Count¹ US: 8,246 Value for everyday items Most items priced below $10 Pricing Strategy Multi-price with ~13% of sales at $1 or less Great values and convenient Primarily consumables Merchandise shopping experience and household products Natio
Slide 9: The New Dollar Tree: Creates leading discount retailer in North America
The New Dollar Tree Creates leading discount retailer in North America Pre-Acquisition Post-Acquisition • US: 4,891 • US: 8,246 • US: 13,137 North • Canada: 189 • Canada: 189 American 1 • Total: 5,080 • Total: 13,326 footprint • Dollar Tree (4,673) • Family Dollar (8,246) • Family Dollar (8,246) • D
Slide 10: Complementary Business Models Across Fixed- and Multi-Price Points
Complementary Business Models Across Fixed- and Multi-Price Points Dollar Tree will be better positioned to provide our customers with merchandise they want and need given a broader pricing strategy Broadens Dollar Tree’s fixed-price point platform to offer more variety, more value and serve more cu
Slide 11: Targets Broader Range of Customers & Geographies
Targets Broader Range of Customers & Geographies Dollar Tree and Family Dollar serve different customer segments • Dollar Tree targets a broad range of “Middle America” consumers • Family Dollar targets “Low- to Lower-Household Income” consumers Transaction will enable the combined company to delive
Slide 12: Complementary Merchandise Expertise
Complementary Merchandise Expertise Significant opportunity to build on our legacy strengths in variety and consumables Offer compelling assortments at prices that WOW our customers Right products, right place, right time Seasonal Home 4% Products Consumable 10% 50% Merchandise Apparel & mix 1 Consu
Slide 13: Significant Synergy Opportunity
Significant Synergy Opportunity Sourcing & Procurement Distribution & Logistics Format Optimization SG&A Approximately $300mm of estimated run-rate annual synergies by Year 3 13
Slide 14: Proven Track Record of Financial Performance
Proven Track Record of Financial Performance Dollar Tree has a strong history of success and consistent growth over the past 10 years Between 2003-2013, has achieved: Sales CAGR of 11% EBITDA CAGR of 11% Leading steward of capital generating significant returns to shareholders ROE of 42% in 2013 ROI
Slide 15: Financing and Liquidity
Financing and Liquidity Financing sources Deleveraging profile Expected financing includes a combination of: Pro forma adjusted debt / LTM EBITDAR of 5.6x 1 • Balance sheet cash ($569 million) Dollar Tree’s strong track record of financial performance and ability to generate significant • $1.25 bill
Slide 16: Keys to Our Current & Future Success
Keys to Our Current & Future Success Compelling Concept Flexible Merchandise Sourcing Solid Balance Sheet Powerful Store Economics Scalable Infrastructure Environment of Continuous Improvement 16
Slide 17: Dollar Tree's Mission & Strategy
Dollar Tree’s Mission & Strategy The acquisition of Family Dollar is consistent with Dollar Tree’s Mission & Strategy Mission Strategy To be Wow the customer The Winner Invest in our people In Value Retailing Best Value New stores-more, better, faster Best Stores New businesses-new Best People growt
Slide 18: Slide 18
Family Dollar Stores — Merger or Acquisition (July 2014) on 6ix