Dollar General Agrees to $6.87 Billion Buyout By Private-Equity Firm

Dollar General Corp. (DG) said Monday it is being acquired by private-equity firm Kohlberg Kravis Roberts & Co. for about $6.87 billion in a deal that will take the discount retailer private.

Dollar General shareholders must still approve the deal. The company's board approved the transaction, and is recommending that its shareholders vote for it. The board said the deal could close in the third quarter.

The discount retailer operates about 8,260 stores.

Under terms of the deal, Kohlberg Kravis will pay $22 per share for each Dollar General share. The price represents a 31.1 percent premium to the stock's closing price Friday of $16.78 on the New York Stock Exchange.

Dollar General shares climbed $4.72, or 28 percent, to $21.50 in premarket trading.

KKR will also assume $380 million in debt as part of the deal, Dollar General said.

"We are very pleased to announce a transaction that provides excellent value for our shareholders, representing a significant premium and the certainty of cash," said David A. Perdue, chairman and CEO of Dollar General.

Last week, Dollar General reported its February sales at stores open at least a year rose 4.9 percent, beating Wall Street forecasts for a 4.6 percent jump. Total sales for the month rose 7.8 percent to $695.6 million from $645.4 million.

The company, which has about 64,500 workers, posted 2006 earnings of $350.2 million on sales of $8.58 billion.