PROVIDENCE, R.I. and
MINNEAPOLIS, July 26, 2018 /PRNewswire/ -- United Natural
Foods, Inc. (NASDAQ: UNFI) and SUPERVALU INC. (NYSE: SVU) today
announced that they have entered into a definitive agreement under
which UNFI will acquire SUPERVALU for $32.50 per share in cash, or approximately
$2.9 billion, including the
assumption of outstanding debt and liabilities.
"This transaction accelerates UNFI's "Build out the Store"
growth strategy by immediately enhancing our product range,
equipping us to bring an attractive, comprehensive product
portfolio to an expanded universe of customers," said Steve Spinner, UNFI's Chief Executive Officer
and Chairman. "Combining our leading position in natural and
organic foods with SUPERVALU's presence in fast-turning products
makes us the partner of choice for a broader range of customers.
Together, we can provide our "better for you" products as well as
other high-growth segments, improving customers' competitive
advantages in a dynamic marketplace. These benefits, plus our
increased efficiency and productivity, will enable us to create
value for our shareholders, enhance opportunities for our
suppliers, provide a broader assortment for our customers and
create new prospects for our associates over the long
term."
"The combination of UNFI and SUPERVALU provides a substantial
premium and delivers certainty of value to our stockholders,
meaningful benefits to our customers, expanded opportunities for
our employees, and the ability for us and our vendors to
efficiently serve a varied customer base," said Mark Gross, SUPERVALU's Chief Executive Officer.
"We have been executing an ambitious strategic transformation for
over two years. We believe that this transaction is the best and
natural next step for our stockholders, customers and employees. I
am very proud of the unwavering commitment and focus of our
employees in driving our strategic transformation and serving our
customers. I am confident that, together, SUPERVALU and UNFI
will be well positioned to succeed – and to help our customers
succeed – in today's grocery landscape."
Compelling Strategic and Financial Benefits
- Diversifies customer base: The transaction will greatly
expand UNFI's customer base and exposure across channels, including
those where demand for "better for you" products is increasing and
UNFI is under-represented. It will also unlock new opportunities
through a comprehensive product portfolio.
- Enables cross-selling opportunities: UNFI will
benefit from its ability to deliver comprehensive and expanded
offerings, including the addition of high-growth perimeter
categories such as meat and produce to UNFI's natural and organic
products.
- Expands market reach and scale: The
wider geographic reach and greater scale of the combined entity is
expected to increase efficiencies and effectiveness.
- Enhances technology, capacity and systems: The combined
entity plans to leverage scalable systems to streamline its
processes, more efficiently meet the needs of its customers and
reduce future capital expenditures.
- Delivers significant synergies: Through
this combination, UNFI will be positioned to realize run rate cost
synergies of more than $175 million
by year 3.
- Accelerating growth: After year one, the transaction is
projected to be accretive to Adjusted EPS in year 1 with
double-digit Adjusted EPS growth after year 1, excluding
one-time costs.
Governance
UNFI Chief Executive Officer and Chairman
Steven Spinner will lead the
combined entity. Sean Griffin, UNFI
Chief Operating Officer, will lead the SUPERVALU integration
efforts, post close and lead an integration committee comprised of
executives from both companies to drive the implementation of best
practices from each company and the delivery of important synergies
and a rapid and smooth integration.
Transaction Details
- UNFI expects to finance the transaction substantially with debt
and Goldman Sachs provided committed financing in the
transaction.
- Over time, UNFI plans to divest SUPERVALU retail assets in a
thoughtful and economic manner.
- Upon closing, UNFI's net debt-to-EBITDA ratio is expected to be
high. With strong cash flows, proceeds from divestitures and
commitment to reducing debt, the company anticipates reducing
leverage by at least two full turns in the first three
years.
- The transaction has been approved by the boards of directors of
both companies and is subject to antitrust approvals, SUPERVALU
shareholder approval and other customary closing conditions, and is
expected to close in the fourth quarter of calendar year 2018.
Advisors
Goldman Sachs and Foros acted as financial
advisors, and Skadden, Arps, Slate, Meagher & Flom LLP and
Jones Day LLP acted as legal counsel to UNFI. Barclays and
Lazard acted as financial advisors and Wachtell Lipton Rosen &
Katz LLP acted as legal counsel to SUPERVALU.
Conference Call
UNFI and SUPERVALU will host a joint
conference call to discuss the transaction today at 8:30 am Eastern Time. Participants in the call
will include UNFI Chairman and Chief Executive Officer Steven Spinner, UNFI Chief Operating Officer
Sean Griffin UNFI Chief Financial Officer Mike Zechmeister, and SUPERVALU Chief Executive
Officer Mark Gross. To access
the conference call, please dial (877) 512-9165 (U.S. toll-free) or
+1 (706) 679-5795 (international), and reference conference ID
number 8368779. Access to a live webcast of the call, along
with accompanying slides, will be available on the investor section
of UNFI's website, www.unfi.com.
About UNFI
UNFI delivers healthier food options to
people throughout the United
States and Canada. UNFI
distributes over 110,000 products to more than 43,000 customer
locations including natural product superstores, independent
retailers, conventional supermarket chains, ecommerce retailers,
and food service customers. Recognized as one of the most
effectively managed U.S. companies, UNFI was named in the
"Management Top 250" list by the Wall Street Journal in 2017. To
learn more about how UNFI is Moving Food Forward, visit
www.unfi.com.
About SUPERVALU
SUPERVALU INC. is one of the largest
grocery wholesalers and retailers in the U.S. with fiscal 2018
annual sales of approximately $14
billion. SUPERVALU serves customers across the United States through a network of 3,437
stores composed of 3,323 wholesale primary stores operated by
customers serviced by SUPERVALU's food distribution business and
114 traditional retail grocery stores in continuing operations
operated under three retail banners in three geographic regions
(store counts as of February 24,
2018). Headquartered in Minnesota, SUPERVALU has approximately 23,000
employees (in continuing operations). For more information about
SUPERVALU visit www.supervalu.com.
UNFI and SVU Forward Looking Statements
This press
release contains, and certain statements made by representatives of
UNFI and SUPERVALU, and their respective affiliates, from time to
time may contain, "forward-looking statements" within the meaning
of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. UNFI's and SUPERVALU's actual
results may differ from their expectations, estimates and
projections and consequently, you should not rely on these
forward-looking statements as predictions of future events. Words
such as "expect," "estimate," "project," "budget," "forecast,"
"anticipate," "intend," "plan," "may," "will," "could," "should,"
"believes," "predicts," "potential," "might" and "continues," and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, UNFI's and SUPERVALU's expectations with respect to
future performance and anticipated financial impacts of the
business combination, the satisfaction of the closing conditions to
the business combination and the timing of the completion of the
business combination. These forward-looking statements involve
significant risks and uncertainties that could cause actual results
to differ materially from expected results. Most of these factors
are outside UNFI's and SUPERVALU's control and are difficult to
predict. Factors that may cause such differences include, but are
not limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement relating to the proposed business combination; (2) the
outcome of any legal proceedings that may be instituted against
UNFI or SUPERVALU following the announcement of the merger
agreement and the transactions contemplated therein; (3) the
inability to complete the business combination, including due to
failure to obtain approval of the shareholders of SUPERVALU or
other conditions to closing in the merger agreement; (4) risks
related to the financing of the transaction; (5) the risk that the
business combination disrupts current plans and operations as a
result of the announcement and consummation of the business
combination; (6) the ability to recognize the anticipated benefits
of the business combination, which may be affected by, among other
things, competition, the ability of the combined company to grow
and manage growth profitably and retain its key employees; (7)
costs related to the business combination; (8) risks related to the
disruption of the transaction to SUPERVALU and its management; (9)
the effect of announcement of the transaction on SUPERVALU's
ability to retain and hire key personnel and maintain relationships
with customers, suppliers and other third parties; and (10) other
risks and uncertainties identified in UNFI's and SUPERVALU's
filings with the Securities and Exchange Commission ("SEC"). More
information about other potential factors that could affect UNFI's
and SUPERVALU's business and financial results is included under
the captions "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in
UNFI's Annual Report on Form 10-K for the fiscal year ended
July 29, 2017 and SUPERVALU's Report
on Form 10-K for the fiscal year ended February 24, 2018, as amended, and any updates to
those risk factors set forth in UNFI's and SUPERVALU's Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and other
filings, which have been filed with the SEC and are available on
the SEC's website at www.sec.gov. The foregoing list of factors is
not exclusive. UNFI and SUPERVALU caution readers not to place
undue reliance upon any forward-looking statements, which speak
only as of the date made. UNFI and SUPERVALU do not undertake or
accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements to reflect
any change in its expectations or any change in events, conditions
or circumstances on which any such statement is based, other than
as required by applicable law.
Additional Information will be Filed with the
SEC
SUPERVALU INC. (including any successor thereof,
"SUPERVALU") plans to file with the SEC a proxy statement in
connection with the contemplated transaction (the "Proxy
Statement"), and SUPERVALU may file with the SEC other documents
regarding the proposed transaction. The definitive Proxy Statement
will be mailed to shareholders of SUPERVALU. SHAREHOLDERS OF
SUPERVALU ARE URGED TO READ THE PROXY STATEMENT REGARDING THE
TRANSACTION CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE
AND ANY OTHER DOCUMENTS FILED WITH THE SEC BY SUPERVALU, AS WELL AS
ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Proxy Statement
(when available) and other documents filed with the SEC by
SUPERVALU through the website maintained by the SEC at www.sec.gov.
Free copies of the Proxy Statement (when available) and other
documents filed with the SEC can also be obtained by directing a
request to SUPERVALU INC., Investor Relations, P.O. Box 990,
Minneapolis, MN 55344.
Participants in the Solicitation
UNFI, SUPERVALU and
their respective directors and certain of their executive officers
and employees may be deemed to be participants in the solicitation
of proxies from the shareholders of SUPERVALU in respect of the
proposed transaction. Information regarding SUPERVALU's directors
and executive officers is available in its proxy statement for its
2018 annual meeting of stockholders, which was filed with the SEC
on July 2, 2018, and information
regarding UNFI's directors and executive officers is available in
its proxy statement for its 2017 annual meeting of stockholders,
which was filed with the SEC on November 3,
2017. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the Proxy and
other relevant materials to be filed with the SEC when they become
available. Free copies of this document may be obtained as
described in the preceding paragraph.
CONTACTS:
United Natural Foods, Inc.
Investor Contact:
Faten Freiha
Director, Investor Relations and Corporate Strategy
401-528-8634 ext. 35621
or
Media Contact:
Lissa Perlman
Kekst
lissa.perlman@kekst.com
212 521 4830
SUPERVALU
Investor Contact:
Steve Bloomquist
Vice President, Investor Relations
952-828-4144
steve.j.bloomquist@supervalu.com
or
Media Contact:
Jeff Swanson
Vice President, Communications
952-903-1645
jeffrey.s.swanson@supervalu.com
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SOURCE United Natural Foods, Inc.