The Top 10 Arkansas Business Stories of 2012: Making History

by Arkansas Business Staff  on Monday, Dec. 24, 2012 12:00 am  

The hedge fund’s first major piece of advice was to spin off Murphy USA.

Sure enough, later that month, Murphy Oil announced that the spinoff was happening. The new company would be independent and separately traded, similar to its 1996 spinoff of Deltic Timber Corp. Murphy Oil said its board had authorized a special dividend of $2.50 per share for a total dividend of about $500 million and a share buyback program of up to $1 billion of the company’s shares of common stock.

The spinoff was slated to be complete “by 2013,” company officials said at the time. After the spinoff, Murphy USA would comprise the gasoline kiosk network as well as seven product distribution terminals and two ethanol production facilities in North Dakota and Texas.

Murphy Oil Corp. will focus entirely on exploration and production with activities fo-cused in the U.S., Canada and Malaysia.

At the end of 2012, the company still had not announced who would lead the new Murphy USA, and its stock value was hovering around $60 per share.

5. USA Drug Sold

The pharmacy chain owned by media-shy Stephen LaFrance Sr., mainly branded as USA Drug, made plenty of headlines in 2012, primarily when it was sold to drugstore giant Walgreen Co. in September for $438 million.

The purchase of the 144-store chain and private label SAJ Distributors from Stephen L. LaFrance Holdings Inc. deprived Arkansas of one of its largest private companies. LaFrance had revenue of $825 million in 2011, Walgreen said at the time the acquisition was announced.

The deal also prompted Walgreen to reduce redundancy by closing 76 drugstores across LaFrance’s seven-state footprint, including 27 USA Drug stores in Arkansas. But rather than limiting consumer choice, the deal energized smaller operators who no longer had to compete with two big chains.

“What you’re going to see in the next six months are some independent pharmacies opening up,” said Terry Perkins, owner of Oak Grove Pharmacy in North Little Rock. “The public will really benefit from it.”

In November, Walgreen turned around and sold SAJ Distributors to L&R Distributors Inc. of Brooklyn, N.Y., for an undisclosed price. L&R planned to operate the SAJ Distribution Center and offices in Pine Bluff under the SAJ name and retain “many existing SAJ staff who work in customer service, accounting, purchasing and operations.”

The sale of the USA Drug chain was announced days before a former executive, Garret Sorensen, was sentenced to 33 months in federal prison.



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