Supervalu has finalized the previously announced sale of its Save-A-Lot business to an affiliate of Onex Corporation for $1.365 billion in cash, subject to customary closing adjustments.
In connection with the closing of the sale, Supervalu and Save-A-Lot have entered into a five-year professional services agreement pursuant to which Supervalu will continue providing certain back office services to Save-A-Lot.
“With the successful completion of the Save-A-Lot sale, we are well positioned for the future with a stronger balance sheet, the opportunity to more strategically invest in our business, and the ability to more keenly focus on our core business as a leading grocery wholesaler,” said Mark Gross, Supervalu president and CEO. “We also look forward to continuing our relationship with Save-A-Lot as one of our important professional services customers.”
In addition, Supervalu also confirmed that it has used $750 million of the net proceeds from the sale to prepay that portion of its outstanding term loan balance. The company said it intends to use the remaining net sale proceeds to further reduce debt and improve its capital structure, contribute to its pension plan, as well as to fund corporate and growth initiatives.