SUPERVALU Announces Sale of Save-A-Lot Business for $1.365 Billion
October 17 2016 - 6:45AM
Business Wire
SUPERVALU INC. (NYSE:SVU) today announced that it has entered
into a definitive agreement whereby an affiliate of Onex
Corporation (TSX:OCX) will acquire SUPERVALU’s Save-A-Lot business
for $1.365 billion in cash, subject to customary closing
adjustments. In connection with the sale, SUPERVALU and Save-A-Lot
will enter into a five-year professional services agreement. The
sale of Save-A-Lot is expected to be completed by January 31, 2017,
subject to regulatory approvals and other customary closing
conditions.
“Today’s announcement is the result of a thorough process to
maximize the value of the Save-A-Lot business and best position
SUPERVALU for future success,” said SUPERVALU Non-Executive
Chairman of the Board, Jerry Storch. “SUPERVALU is successfully
executing on its long term strategic vision and positioning the
Company for continued growth and value creation. We are confident
that this transaction will create exciting opportunities for both
SUPERVALU and Save-A-Lot.”
“The sale of Save-A-Lot is another important step in SUPERVALU’s
transformation. It provides us with a stronger balance sheet that
will allow us to further build on our core strengths and growth
opportunities,” said SUPERVALU President and CEO, Mark Gross. “It
has been a pleasure to work with the Save-A-Lot team, and, once
this transaction is completed, I look forward to continuing to work
with them as one of our largest professional services
customers.”
Under the terms of the professional services agreement,
SUPERVALU will provide Save-A-Lot with certain services and support
functions for its day-to-day operations, including cloud services,
merchandising technology, payroll, finance, and other technology
and hosting services.
SUPERVALU expects to use the net proceeds from the sale to
prepay at least $750 million against its outstanding term loan
balance. The Company intends to use the remaining net sale proceeds
to further reduce debt and improve its capital structure, as well
as to fund corporate and growth initiatives.
Advisors
Barclays Capital Inc. and Greenhill & Co., LLC acted as
financial advisors to SUPERVALU, and Wachtell, Lipton, Rosen &
Katz is serving as its legal advisor.
Conference Call
As previously announced, SUPERVALU will hold its fiscal 2017
second quarter conference call on Wednesday, October 19, 2016 at
9:00 a.m. Central Time, at which time SUPERVALU will also discuss
the sale of Save-A-Lot in more detail. The call will be webcast
live at www.supervaluinvestors.com (click on microphone icon).
About SUPERVALU
SUPERVALU INC. is one of the largest grocery wholesalers and
retailers in the U.S. with annual sales of approximately $18
billion. SUPERVALU serves customers across the United States
through a network of 3,342 stores composed of 1,773 stores operated
by wholesale customers serviced primarily by the Company’s food
distribution business; 1,368 Save-A-Lot stores, of which 896 are
operated by licensee owners; and 201 traditional retail grocery
stores (store counts as of June 18, 2016). Headquartered in
Minnesota, SUPERVALU has approximately 40,000 employees. For more
information about SUPERVALU visit www.supervalu.com.
About Save-A-Lot
As one of the largest hard-discount grocery retailers in the
United States, Save-A-Lot owns and operates 472 corporate stores,
and services and supplies another 896 licensee-owned stores across
the country (store counts as of June 18, 2016). With more than
1,300 stores in urban, suburban, and rural areas, Save-A-Lot
reaches more than 5 million shoppers each week. Store sizes vary,
but in general range in size between approximately 15,000-20,000
square feet. The stores provide a limited selection of national and
exclusive store brand products with a focus on its fresh offerings
including USDA-inspected beef, pork and poultry, and farm-fresh
fruits and vegetables.
FORWARD-LOOKING STATEMENTS
Except for the historical and factual information contained
herein, the matters set forth in this communication, particularly
those pertaining to SUPERVALU’S expectations, guidance, or future
operating results, and other statements identified by words such as
“estimates,” “expects,” “projects,” “plans,” “intends,” and similar
expressions are forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially, including the possibility that regulatory and
other approvals and conditions to the transaction are not received
or satisfied on a timely basis or at all; the possibility that
modifications to the terms of the transaction may be required in
order to obtain or satisfy such approvals or conditions; the
possibility that Supervalu may not fully realize the projected
benefits of the transaction; changes in the planned use of proceeds
from the transaction; changes in the anticipated timing for closing
the transaction; business disruption during the pendency of or
following the transaction; diversion of management time on
transaction-related issues; and the reaction of customers and other
parties to the transaction and other risk factors relating to our
business or industry as detailed from time to time in SUPERVALU’s
reports filed with the SEC. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this news release. Unless legally required,
SUPERVALU undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20161017005499/en/
SUPERVALU INC.Investor
ContactSteve Bloomquist, 952-828-4144steve.j.bloomquist@supervalu.comorMedia ContactJeff Swanson,
952-903-1645jeffrey.s.swanson@supervalu.com
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