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Spartan, Nash Finch Combine Distribution, Retail Operations

Regional grocery distributor and retailer Spartan Stores, Inc. is merging with Nash Finch Co, one of the leading food distribution companies in the United States in an all-stock merger valued at approximately $1.3 billion, including existing net debt at each company. The combination will generate pro forma annual sales of approximately $7.5 billion, the companies stated in announcing the merger.

Grand Rapids, MI-based Spartan Stores is the nation’s ninth largest grocery distributor with 1.4 million square feet of warehouse, distribution, and office space located in its hometown, the company noted. It distributes more than 40,000 private and national brand products to 390 independent grocery locations in Michigan, Indiana and Ohio. The company’s 102 corporate-owned stores, including Family Fare Supermarkets, Glen’s Markets, D&W Fresh Markets, VG’s Food and Pharmacy, and Valu Land, operate in Michigan. Nash Finch is a Fortune 500 company and the largest food distributor serving military commissaries and exchanges in the United States. Nash Finch distributes food to military commissaries and exchanges and independent grocery retailers located in 37 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores, Bahrain and Egypt, it noted. The company also owns and operates retail stores, primarily supermarkets, under the Family Fresh Market, Econofoods, Family Thrift Center, No Frills, Bag ‘n Save, AVANZA, and Sun Mart trade names.

Together, Spartan Stores and Nash Finch will mount 22 distribution centers covering 37 states, run 177 retail stores and act as leading distributor to military commissaries and exchanges in the United States, the companies maintained. The combined entity will have significant scale and geographic reach to provide value-added distribution services to a diversified customer base and drive new growth opportunities through increased customer penetration, new customer additions and expansion into new market segments, the companies asserted. The combined company, they maintained, will also have a comprehensive portfolio of strong private brands including Spartan Stores’ Spartan brand and Nash Finch’s Our Family and Nash Brothers Trading Company brands.

“Together, we will create one of the premier grocery wholesaler and retail operators, with a comprehensive portfolio of high-quality private brands, nationwide distribution services and a strong platform for future growth,” Dennis Eidson, Spartan Stores, president and CEO stated. “By combining our resources, expertise and talent, we will become a stronger and more efficient organization with an enhanced ability to leverage our size, geographic reach and hybrid business model to better compete in the evolving grocery industry. In addition, the scale of the combined company will provide efficiencies and savings in purchasing and strengthen our ability to serve our independent retail customers, military commissaries and exchanges and retail consumers. At the same time, the combined company will have greater financial flexibility to drive growth, which will provide opportunities for many employees and deliver increased value to shareholders.”

Alec Covington, Nash Finch president and CEO commented, “This transaction is consistent with our vision to become the largest and most admired food distributor in the U.S. The complementary operations and outstanding strategic fit of these two companies create significant value for both companies’ shareholders. Our shared vision to provide best-in-class services to our wholesale customers and attractive formats for our retail consumers, as well as our continued commitment to serving our nation’s military heroes and their families, at home and abroad, creates a powerful platform for growth over the long term.”

Eidson will serve as president and CEO of the combined company, according to the retailers, while Covington will remain with the combined organization in an advisory role to help ensure a smooth transition.