Jean Coutu Group acquires 1,539 Eckerd bannered stores and closes equity/senior note offering and bank facilities

On July 31, 2004, Québec-headquartered The Jean Coutu Group (PJC) Inc. became the fourth largest drugstore chain in North America through the acquisition of 1,539 Eckerd bannered stores, six regional distribution centers, the Eckerd headquarters in Largo, Florida, the Eckerd trade name and other related assets from TDI Consolidated Corporation, a wholly-owned subsidiary of J.C. Penney Company, Inc.

The total consideration of approximately US$2.5 billion for the acquisition along with the refinancing of The Jean Coutu Group (PJC) Inc. existing indebtedness, were financed through the combination of a public offering in Canada of $582 million of subscription receipts issued to a syndicate of underwriters led by Merrill Lynch Canada Inc. and National Bank Financial Inc., which were exchanged into Class A Subordinate Voting Shares of the Company; the issuance in Canada and in the US of US$350 million of 7.625% senior notes due in 2012 and the issuance of US$850 million of 8.5% senior subordinated notes due in 2014, such notes being guaranteed by the subsidiaries of The Jean Coutu Group (PJC) Inc. and underwritten by Merrill Lynch & Co., Deutsche Bank Securities and National Bank Financial Inc. on a US Securities and Exchange Commission Rule 144A private placement basis; and senior secured credit facilities of US$1.7 billion from a syndicate of financial institutions arranged in Canada and in the US by Merrill Lynch, Pierce, Fenner & Smith Incorporated, National Bank of Canada and Deutsche Bank Trust Company Americas.

The acquisition and financing was spearheaded and coordinated in Montréal by Yvon Martineau (mergers and acquisitions and securities) of the Montréal office of Fasken Martineau. In addition, The Jean Coutu Group (PJC) Inc. was also represented by a team that included Peter Villani (securities), Marc Novello (banking), Sylvie Bourdeau (corporate), Alain Ranger (tax), Gilles Carli (tax), Mireille Tremblay (securities), Jean-Pierre Chamberland (securities), Martin Racicot (banking), Lori Seidman (corporate), Daniel Yelin (securities), Thomas Copeland (tax) and Sébastien Hébert (securities) all of the Montréal office of Fasken Martineau; John Abraham and Belinda James of Fasken Martineau in Toronto and Philippe David of Fasken Martineau in New York.