The Jean Coutu Group (PJC) Inc.

The Jean Coutu Group (PJC) Inc.

June 04, 2007 14:29 ET

The Jean Coutu Group Completes the Brooks Eckerd Transaction

LONGUEUIL, QUEBEC--(Marketwire - June 4, 2007) - The Jean Coutu Group (PJC) Inc. ("The Jean Coutu Group" or the "Company") (TSX:PJC.A) announced that it has closed the Brooks and Eckerd drugstore chains transaction with Rite Aid Corporation ("Rite Aid") (NYSE: RAD) effective today.

On August 24, 2006, The Jean Coutu Group announced that it had entered into a definitive agreement to sell its United States network of approximately 1,854 Brooks and Eckerd stores and six distribution centers, primarily located on the East Coast and in the Mid-Atlantic region, to Rite Aid.

On June 1, 2007, the companies announced that the Federal Trade Commission ("FTC") had accepted the proposed consent agreement requiring Rite Aid to divest 23 stores in nine states and that the Hart-Scott-Rodino Act waiting period had expired, permitting the parties to close on the transaction. Rite Aid will also enter into state consent orders for the divestitures required by the FTC and for the divestiture of three additional stores.

The Jean Coutu Group received $2.36 billion in cash, subject to a working capital adjustment, and 250 million shares of Rite Aid common stock in the transaction, giving it an approximate 32% common equity interest and approximately 30% of the voting power in the expanded Rite Aid.

"The completion of this transaction is a transformational event for the shareholders of The Jean Coutu Group. The Company has seized a unique strategic opportunity to optimize its U.S. presence by taking its investment in a regional drugstore chain and changing it into the leading ownership position in a national chain. In doing so, we now have the scale to better compete in the growing U.S. drugstore industry and have a virtually debt-free balance sheet. Going forward, we will also continue to build on our position as one of the leaders in the Canadian drugstore market," said Jean Coutu, Chairman, President and CEO of The Jean Coutu Group.

Following the Brooks Eckerd transaction, the Company has repaid substantially all of its long-term debt comprised of its term loan facilities maturing on July 30, 2009 and 2011, as well as substantially all of its $350.0 million of unsecured senior notes and its $850.0 million of unsecured senior subordinated notes.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," "projects" or "anticipates" or similar expressions that concern our strategy, plans or intentions. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those expected. While the Company believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect the Company's actual results. The Company undertakes no obligation to update any forward-looking statements contained in this press release.

About The Jean Coutu Group

The Jean Coutu Group (PJC) Inc. operates a network of 326 franchised drugstores in Canada located in the provinces of Quebec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Sante Beaute) and employs more than 15,000 people. The Jean Coutu Group is one of the most trusted names in Canadian pharmacy retailing. The Company holds a significant interest in Rite Aid Corporation, one of the United States' leading drugstore chains, with annual revenues of more than $27 billion and more than 5,000 drugstores in 31 states and the District of Columbia.

Contact Information

  • Source: The Jean Coutu Group (PJC) Inc.
    Michael Murray
    Director, Investor Relations
    450-646-9611, ext. 1068
    Helene Bisson
    Director, Public Relations
    450-646-9611, ext. 1165