8-KMaterial AgreementsOther EventsExhibits & Filings

DOLLAR GENERAL CORP 8-K Report, Material Agreement (Oct 12, 2012)

Filed October 12, 2012For Securities:DG

Summary

Dollar General Corporation (DG) filed an 8-K on October 12, 2012, reporting on significant corporate actions. The primary event detailed is the company's entry into amendments to its existing credit agreements on October 9, 2012. These amendments provide additional capacity for the company to repurchase, redeem, or otherwise acquire up to $250 million of its capital stock. This action is directly linked to a significant share repurchase from Buck Holdings, L.P., which was completed on October 11, 2012, with the repurchase of approximately 4.93 million shares for $250 million. This 8-K signals a strategic capital allocation decision by Dollar General, utilizing debt financing to fund a substantial share buyback. Investors should note the involvement of major financial players like CitiCorp, Wells Fargo, Goldman Sachs, and KKR Capital Markets in the credit arrangements and underwriting of the related secondary offering. The repurchase from Buck Holdings, L.P., an entity with significant ties to major shareholders, suggests a deleveraging or return of capital to a key stakeholder, funded by new borrowings. The reimbursement of lender fees by Buck Holdings, L.P. further clarifies the transaction's financial mechanics.

Key Highlights

  • 1Dollar General amended its credit agreements on October 9, 2012, to allow for up to $250 million in share repurchases.
  • 2The company repurchased approximately 4.93 million shares of its common stock from Buck Holdings, L.P. on October 11, 2012, for approximately $250 million.
  • 3The share repurchase was funded by $250 million in borrowings under the company's senior secured asset-based revolving credit facility.
  • 4This action is part of a previously announced share repurchase program and a secondary offering involving an additional 5.4 million shares from Buck Holdings, L.P.
  • 5Key financial institutions involved include CitiCorp North America, Inc. and Wells Fargo Bank, National Association as administrative/collateral agents, and Citigroup Global Markets Inc., Goldman, Sachs & Co., and KKR Capital Markets LLC as underwriters.
  • 6Affiliates of Kohlberg Kravis Roberts & Co. L.P. and Goldman, Sachs & Co. have a significant shareholder interest in Dollar General through their investment in Buck Holdings, L.P.

Frequently Asked Questions

The amendments to the credit agreements allow Dollar General to incur additional debt specifically for the purpose of repurchasing, redeeming, or otherwise acquiring up to $250 million of its capital stock.

The seller was Buck Holdings, L.P., from which Dollar General repurchased approximately 4.93 million shares of its common stock.

The repurchase was funded through borrowings of $250 million under Dollar General's senior secured asset-based revolving credit facility.

Buck Holdings, L.P. is associated with Kohlberg Kravis Roberts & Co. L.P. (KKR) and Goldman, Sachs & Co., both of which acted as underwriters in a related secondary offering. Affiliates of KKR and Goldman Sachs are significant shareholders of Dollar General through their investment in Buck Holdings, L.P.