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4-Traders Homepage  >  Equities  >  Nyse  >  SUPERVALU INC.    SVU

Delayed Quote. Delayed  - 04/24 10:02:21 pm
3.85 USD   +0.26%
04/20 SUPERVALU : to acquire Unified Grocers
04/18 SUPERVALU : Egged on by Easter sales boost
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Supervalu : to acquire Unified Grocers

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04/20/2017 | 03:44pm CEST

The $375 million deal will create one of nation's top grocery wholesale companies


The company that sold Albertsons in 2013, is making a push toward the wholesale grocery business on the West Coast.

Supervalu and Unified Grocers announced they have entered into a definitive merger agreement for Supervalu to acquire the latter in a transaction valued at $375 million.

Unified Grocers is a retailer-owned wholesale grocery distributer supplying independent retailers throughout the western U.S.

Supervalu is one of the largest grocery wholesalers and retailers in the U.S. with annual sales of $13 billion.

Unified is a combination of three West Coast wholesale grocery cooperatives founded more than 80 years ago.

Two of the cooperatives, one based in Los Angeles and another here in Portland, merged in 1999 to form Unified Western Grocers. After buying Seattle-based Associated Grocers in 2007, it dropped "Western" from the name. Unified's largest customer, at 17 percent of its net sales last year, is Portland-based Cash & Carry discount warehouse groceries.

The deal is compromised of approximately $114 million in cash for 100 percent of the outstanding debt of Unified Grocers, plus the assumption and pay-off of Unified Grocers' net debt at closing - $261 million.

Combined, the two grocery wholesale organizations sales equaled approximately $16 billion in 2016. Together, they operate 24 distribution centers in 46 states, serving more than 3,000 stores.

Supervalu said it will aim to expand Unified's Market Centre division, a unit that provides specialty, ethnic and wellness products.

"We're thrilled at the opportunity to bring together these two great organizations," said Mark Gross, Supervalu's president and CEO. "By acquiring the Unified business, including gaining a wealth of expertise and talent, we will become a stronger and more efficient organization. The transaction will enhance our ability to help our customers better compete in the evolving grocery industry. We're also excited to serve Unified's dynamic retailer base. Unified's Members and customers operate some of the country's most exciting and progressive Hispanic and multiple other ethnic formats, specialty, gourmet, natural/organic, price impact and traditional stores. They complement our existing customer base and we look forward to facilitating collaboration and innovation across such an impressive collection of creative merchants."

Headquartered in Minnesota, Supervalu employs 30,000 and serves 2,067 stores composed of 1,850 stores operated by wholesale customers it services. It also have 195 grocery stores under five retail banners and 22 Shop 'N Save stores.

Headquartered in Commerce, California and founded in 1922, Unified Grocers has annual sales of approximately $3.8 billion and owns 3 million square feet of real estate.

"We believe this transaction will benefit the members and customers of Unified Grocers as they look for new and innovative ways to serve the communities in which they operate," said Bob Ling, Unified Grocers' president and CEO. "Supervalu and Unified share a common vision of providing best-in-class services and products to the independent grocer. The cultural fit between Supervalu and Unified well positions the combined company to pursue a shared dedication and commitment to growth and innovation, providing increased value to customers."

The transaction was unanimously approved by both companies' boards of directors and is expected to close late this summer, subject to Unified's shareholders. After the merger is completed, Unified will be a wholly-owned subsidiary of Supervalu.

Supervalu said it expects to spend $60 million on transition and integration costs in the first two years after the deal closes, and within the next three years it expects to save $60 million in the annual cost of running the combined operations.

© Copyright © 2017 Portland Tribune, All rights reserved., source Newspapers

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Financials ($)
Sales 2017 14 942 M
EBIT 2017 333 M
Net income 2017 -
Debt 2017 1 404 M
Yield 2017 -
P/E ratio 2017 15,40
P/E ratio 2018 10,41
EV / Sales 2017 0,16x
EV / Sales 2018 0,18x
Capitalization 1 030 M
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Mean consensus HOLD
Number of Analysts 11
Average target price 5,69 $
Spread / Average Target 48%
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Mark Gross President, Chief Executive Officer & Director
Gerald L. Storch Non-Executive Chairman
Bruce H. Besanko EVP, Chief Operating & Financial Officer
Randy G. Burdick Chief Information Officer & Executive VP
Irwin S. Cohen Independent Director
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