The Jean Coutu Group (PJC) Inc.

The Jean Coutu Group (PJC) Inc.

October 07, 2005 16:47 ET

The Jean Coutu Group Announces the Sale of Certain Canadian Real Estate Assets

LONGUEUIL, QUEBEC--(CCNMatthews - Oct. 7, 2005) - The Jean Coutu Group (PJC) Inc. (the "Company" or the "Jean Coutu Group") (TSX:PJC.SV.A) announced today that it has come to an agreement whereby Delek Belron International Ltd. and partners will acquire certain Canadian real estate assets of the Company. These assets consist of 30 commercial properties, composed of strip malls located in the Provinces of Quebec and Ontario, containing Jean Coutu drugstores and other retail tenants. Concurrently, the Company will lease back the drugstore locations under equivalent lease conditions.

The agreement foresees the payment of the full amount of the $C 111.7 million purchase price on November 1, 2005, the scheduled closing date. The transaction will generate a pre-tax gain of approximately $C 26 million, of which $C 16 million will be recorded in fiscal 2005-2006 and $C 10 million representing the leaseback portion for the Jean Coutu drugstores will be deferred over the life of the leases. The Company intends to use the net proceeds to repay a portion of its Senior Secured Credit facilities.

"These malls were non-core holdings and the timing was good to sell them in order to obtain good value for them. This sale will allow us to reduce indebtedness, which is in line with our stated commitment to deleverage over the coming years," said Francois J. Coutu, President and Chief Executive Officer.

About The Jean Coutu Group

The Jean Coutu Group (PJC) Inc. is the fourth largest drugstore chain in North America and the second largest in both the eastern United States and Canada. The Company and its combined network of 2,172 corporate and franchised drugstores (under the banners of Brooks and Eckerd Pharmacy, PJC Jean Coutu, PJC Clinique and PJC Sante Beaute) employ more than 60,000 people.

The Jean Coutu Group's United States operations employ 46,000 people and comprise 1,851 corporate owned stores located in 18 states of the Northeastern, mid-Atlantic and Southeastern United States. The Jean Coutu Group's Canadian operations and franchised drugstores in its network employ over 14,000 people and comprise 321 PJC Jean Coutu franchised stores in Quebec, New Brunswick and Ontario.

"Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995: Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The words "looking forward," "looking ahead," "believe(s)," "should," "may," "expect(s)," "anticipate(s)," "likely," "opportunity," and similar expressions, among others, identify forward-looking statements. The Company undertakes no obligation to update any forward-looking statements contained in this press release.

Contact Information

  • Source: The Jean Coutu Group (PJC) Inc.
    Andre Belzile
    Senior Vice-President Finance and Corporate Affairs
    (450) 646-9760
    The Jean Coutu Group (PJC) Inc.
    Michael Murray
    Director, Investor Relations
    (450) 646-9760
    Helene Bisson
    Media and Public Relations
    (514) 393-1180, ext. 343