MINNEAPOLIS & POMPANO BEACH, Fla.--(BUSINESS WIRE)--SUPERVALU INC. (NYSE: SVU) and Associated Grocers of Florida, Inc. today announced that they have entered into a definitive merger agreement for SUPERVALU to acquire Associated Grocers in a transaction valued at approximately $180 million.
This transaction provides SUPERVALU with the ability to expand its operations into a new part of Florida as well as provides new opportunities to bring SUPERVALU's products and services to Associated Grocers' diverse customer base in South Florida, the Caribbean, and other international markets. Additionally, as part of the pending transaction, SUPERVALU has reached a long-term supply agreement with Associated Grocers' largest customer that will go into effect upon the closing of the transaction.
Founded in 1945, Associated Grocers is a retailer-owned cooperative that distributes full lines of grocery and general merchandise to independent retailers, primarily in South Florida, the Caribbean, Central and South America and Asia. Associated Grocers' customer base of conventional, specialty and ethnic stores includes an exciting mix of multi-cultural independent grocers that complements SUPERVALU's customer base. SUPERVALU expects the combined company will be well positioned to efficiently serve its broad range of customers and offer an array of value added services, helping Associated Grocers and SUPERVALU customers compete and thrive in an increasingly demanding grocery environment. During Associated Grocers' last fiscal year, which ended on July 29, 2017, Associated Grocers' revenues were approximately $650 million, estimated by SUPERVALU under its accounting policies.
"Associated Grocers represents a great opportunity for us to further expand our wholesale business into another important region," said Mark Gross, SUPERVALU's President and Chief Executive Officer. "We believe SUPERVALU is uniquely positioned to be the supplier of choice across the grocery industry and this acquisition is another example of how we're delivering on our growth strategy."
Gross continued, "Christopher Miller and his talented team have done outstanding work to build and support a dynamic and diverse retailer base. We're looking forward to welcoming the strengths and talents of the Associated Grocers team to SUPERVALU and working together so that, once the transaction is complete, we can bring the benefits of our combined scale and expertise to their customers to help them better compete in the evolving grocery industry."
"I'm very excited about this announcement," said Associated Grocers' President, Christopher Miller. "Being a part of SUPERVALU will provide us with access to resources, products, services and overall capabilities that are essential to helping us continue to provide top-notch support to our customers. SUPERVALU and Associated Grocers share a common dedication and commitment to the independent retailer and together we'll be in a great position to provide opportunities, innovation and increased value to our customers, both domestically and in foreign markets."
The transaction, which was approved by each company's board of directors, is currently expected to close by the end of calendar year 2017, subject to approval by Associated Grocers' shareholders and other customary closing conditions. Following completion of the merger, Associated Grocers will be a wholly-owned subsidiary of SUPERVALU.
Faegre Baker Daniels LLP and Cleary Gottlieb Steen & Hamilton LLP acted as SUPERVALU's legal counsel. RBC Capital Markets LLC acted as financial advisor to Associated Grocers of Florida and Akerman LLP acted as Associated Grocers' legal counsel.
A conference call to review SUPERVALU's second quarter results is scheduled for 9:00 a.m. central time today. SUPERVALU intends to discuss this announcement on that call. The call will be webcast live at www.supervaluinvestors.com (click on microphone icon). A replay of the call will be archived at www.supervaluinvestors.com. To access the website replay, go to the "Investors" link and click on "Presentations and Webcasts."
About SUPERVALU INC.
SUPERVALU INC. is one of the largest grocery wholesalers and retailers in the U.S. with annual sales of approximately $16 billion. SUPERVALU serves customers across the United States through a network of 3,337 stores composed of 3,120 wholesale primary stores operated by customers serviced by SUPERVALU's food distribution business and 217 traditional retail grocery stores operated under five retail banners in six geographic regions (store counts as of September 9, 2017). Headquartered in Minnesota, SUPERVALU has approximately 31,000 employees. For more information about SUPERVALU visit www.supervalu.com.
About Associated Grocers of Florida, Inc.
Associated Grocers of Florida, Inc. is a retailer-owned cooperative distributing full lines of groceries and general merchandise under both national and store brands. Founded in 1945, the wholesale distributor serves both independent retailers and regional chains throughout Florida, Central America, South America and Caribbean countries. Headquartered in Pompano Beach, FL, Associated Grocers operates two distribution centers and has approximately 650 employees. Associated Grocers owns approximately 1.5 million square feet of real estate.
Forward Looking Statements
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
Except for the historical and factual information, the matters set forth in this news release and SUPERVALU's earnings conference call, particularly those pertaining to the expected completion of the merger (including the timing thereof), the ability to consummate the merger (including but not limited to the receipt of all required regulatory approvals) and SUPERVALU's expectations, guidance, or future operating results (including expected synergies), and other statements identified by words such as "estimates" "expects," "projects," "plans," "intends," "outlook" 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 ability to satisfy the closing conditions and close the proposed acquisition 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 all required approvals, business disruption, ability to achieve operational efficiencies, including synergistic and other benefits of the proposed acquisition, ability to effectively retain key employees and maintain and grow customer relationships, ability to effectively manage organization and integration changes during the pendency of or following the transaction, ability to achieve expected financial results for the combined entity and other risk factors relating to the 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. For more information, see the risk factors described in SUPERVALU'S Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC. 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.