New local management group at Tops assumes millions in debt - The Buffalo News

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New local management group at Tops assumes millions in debt

For the last six years, Tops Markets President Frank Curci has been calling the shots at the Amherst-based supermarket chain.

But Curci’s management clout didn’t give him the same power when the chain’s owners sat down.

He wielded far less influence than the pair of Wall Street investment firms that held a nearly 85 percent ownership stake in the company. Curci’s 2.7 percent stake in Tops put him fifth in line among the chain’s biggest owners.

But not anymore.

The deal announced Thursday will give Curci and five other high-ranking Tops executives complete control over all of the company’s stock, putting Tops firmly in the hands of its local management.

“Management is buying the stock of the company and will own all assets and liabilities, including debt,” said Katie McKenna, a Tops spokeswoman.

So how does an executive go from owning less than 3 percent of a company to being the lead player in a group of six executives putting together a deal worth at least $460 million?

With borrowed money. A lot of it. And by assuming millions and millions more in existing debt.

“It’s highly leveraged,” said Buffalo native Burt P. Flickinger III, the managing director at SRG Insight, a retail consulting firm in Connecticut.

Exactly how Curci and his fellow executives are financing the deal isn’t entirely clear. The executives weren’t commenting on Thursday, but the announcement said Bank of America has agreed to finance the deal, which the management group hopes to close before the end of the year.

How much the executives are borrowing isn’t known, nor is it known how much cash they’re having to put up.

It’s also possible that the bank borrowings could just be a bridge to another refinancing, possibly as early as within the next year or two, Flickinger said. One possibility is that the management group could sell a stake in the company to another private-equity firm or an investor group. They also could raise cash by selling a stake to the public in an initial public stock offering, Flickinger said.


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