Rite Aid — Merger or Acquisition (August 2006)
17 slides from Rite Aid's merger presentation, Aug 24, 2006
Slide 1: Creating Value for Rite Aid and The Jean Coutu Group
Creating Value for Rite Aid and The Jean Coutu Group
Slide 2: Cautionary Statement Regarding Forward Looking Statements
Cautionary Statement Regarding Forward Looking Statements This is an oral presentation which is accompanied by slides. Investors are urged to review both Companies’ regulatory filings. During today’s presentation, forward-looking statements may be made. Such statements are subject to certain risks a
Slide 3: Transaction overview
Transaction overview Rite Aid and The Jean Coutu Group have agreed to merge all Brooks and Eckerd stores into Rite Aid. All 1,858 Brooks Eckerd drugstores included in transaction. Significant real estate assets also included. Total consideration paid to The Jean Coutu Group will be approximately $3.
Slide 4: Transaction overview
Transaction overview The Boards of Directors of Rite Aid and The Jean Coutu Group have approved the transaction. Rite Aid has all required financing commitments in place. Expected close could be as early as Rite Aid’s fiscal-07 Q4 & PJC’s fiscal-07 Q3 (December 2006 to March 2007). Subject to Hart-S
Slide 5: Rite Aid Transaction rationale
Rite Aid Transaction rationale Information systems and a supply chain already capable of handling additional stores. Leverage programs, best practices, management capabilities across larger store network to improve profitability through cost savings, sales growth. Management has significant experien
Slide 6: Expanded Rite Aid will be a stronger #3 competitor
Expanded Rite Aid will be a stronger #3 competitor Source: Public filings Stores 6,171 5,401 3,319 1,858 1,800 1,013 501 247 U.S. Pre-transaction 1,800 1,013 501 247 6,171 5,401 PF 5,177 Post-transaction Stores 3,319 1,858
Slide 7: A stronger national drugstore chain
A stronger national drugstore chain… Rite Aid states Brooks Eckerd states Rite Aid Brooks Eckerd states No. of Rite Aid stores No. of Brooks Eckerd stores 132 19 71 36 589 24 23 313 9 237 1 117 47 49 70 28 110 46 188 107 258 347 286 102 382 356 6 79 2 87 132 11 31 38 38 165 47 35 54 157 137 24 21 13
Slide 8: With leadership in Key MSAs
… with leadership in Key MSAs Leadership positions in East Coast MSA’s Source: Metro Markets 2005 Metro area rankings 3 Hartford, CT 3 Nashville, TN 3 Boston, MA 3 Atlanta, GA 2 Allentown, PA 2 Worchester, MA 2 Albany, NY 2 Stamford, CT 2 Richmond, VA 2 Charlotte, NC 2 Providence, RI 2 District of C
Slide 9: Expanded Rite Aid Company snapshot
Expanded Rite Aid Company snapshot Fiscal 2006 Figures ($ millions, except for associates) 1 PJC USA Fiscal 2006 ADJUSTED EBITDA excludes non-recurring charges. Rite Aid PJC - US A Stores (latest publi shed count ) 3,3 19 1,858 Associates 70,200 46, 1 00 Revenue $17,271 $9,496 Gross profit $4,699 $2
Slide 10: Value Drivers
Value Drivers Rite Aid expects to obtain annual net synergies of approximately $150 million after the first 12 months following the close. The company expects the transaction to be accretive 12 months after the close by $0.09 to $0.15 per diluted share. The company expects the transaction to be dilu
Slide 11: Rite Aid Skills, talents & infrastructure
Rite Aid Skills, talents & infrastructure Current opportunity requires many of the same capabilities we’ve successfully built: Strong supply chain processes Solid vendor relationships Consistent pricing strategy Consistent advertising and product promotion programs Innovative marketing against targe
Slide 12: Transaction rationale
The Jean Coutu Group Transaction rationale Note: The Jean Coutu Group-Canada figures reflect LTM as of May 2006 Leading shareholder in a strengthened U.S. platform n Unique strategic opportunity to optimize U.S. presence by transforming investment in a regional drugstore chain into the leading owner
Slide 13: Pro forma financial impact
The Jean Coutu Group Pro forma financial impact Pro forma May 2006 financial summary ($ millions) Fully repay Term A & B Loans & Revolver. Retire 7 5/8% $350 M Senior Unsecured Notes. Rite Aid intends to assume the 8.5% $850 M Senior Subordinated Notes. Note: EBITDA reflects reported Fiscal 2006 EBI
Slide 14: Pro forma financial impact
The Jean Coutu Group Pro forma financial impact Pro forma financial impact - ($ millions) The investment in Rite Aid will be accounted for using the equity method in future periods. US operations will not be presented as discontinued operations considering the continuing company involvement in the e
Slide 15: Next steps - Recap
Next steps - Recap Regulatory clearance – Hart-Scott-Rodino review. Rite Aid Stockholder approval. Expected close could be as early as Rite Aid’s fiscal-07 Q4 & PJC’s fiscal-07 Q3 (December 2006 to March 2007). Integration planning between Rite Aid and The Jean Coutu Group management teams.
Slide 16: Conclusion: Transaction strengthens Rite Aid and PJC
Conclusion: Transaction strengthens Rite Aid and PJC Enhanced scale & national footprint Value creation through meaningful synergies Opportunity for additional revenue synergies Accretive after 12 months Creates significant value for Rite Aid and Jean Coutu Group shareholders Expanded Rite Aid Leadi
Slide 17: Additional Information and Where to Find it
Additional Information and Where to Find it Rite Aid intends to file with the Securities and Exchange Commission a proxy statement in connection with the proposed transaction. The proxy statement will be mailed to the stockholders of Rite Aid. STOCKHOLDERS OF RITE AID ARE ADVISED TO READ THE PROXY S