JACK ECKERD ACQUISITION OF 220 REVCO DRUG STORES

Executive Summary

JACK ECKERD ACQUISITION OF 220 REVCO DRUG STORES will give the chain over 500 stores in both Florida and Texas. Eckerd, which now has 410 stores in Texas and 494 in Florida, will gain through the acquisition 138 Texas drugstores and 43 Florida drugstores. The agreement, announced June 5, will also expand the Clearwater, Florida-based chain's operations in Oklahoma, Mississippi and Louisiana, where Eckerd will add 18, 11 and 10 stores, respectively. Terms of the agreement were not disclosed. The 220 store purchase represents a 14% increase in Eckerd's store base, giving the privately held company almost 1,800 stores in its 13 states of operation and ranking it second behind Rite Aid in store count. Last year, Eckerd purchased 32 stores in three separate transactions: 15 stores in Atlanta via an agreement with Dunaway; five Texas stores from Hilleys; and 10 SupeRx stores in North Carolina. The firm also opened 50 new stores during the year. Eckerd, which also operates photolab and eyecare center businesses (roughly 300 labs/centers), did approximately $3.2 bil. in sales in 1989, with $1.2 bil. coming from pharmacy sales. * The Revco/Eckerd deal is part of Revco's Chapter 11 plan to divest 712 stores in 17 states. The agreement is subject to approval by the Akron federal bankruptcy court, where a hearing is expected to be scheduled for late June. Revco has another deal pending for sale of 221 of its outlets to Reliable Drug Stores ("The Pink Sheet" April 30, T&G-15). The reorganization plan calls for Revco to reduce its store base to approximately 1,100 stores in 10 continuous eastern states.