Supervalu and Unified Grocers have entered into a definitive merger agreement that calls for Supervalu to acquire Unified Grocers in a transaction valued at approximately $375 million.
The deal consists of a $114 million payment in cash for all of Unified Grocers outstanding stock plus the assumption and pay-off of its net debt at closing, which totaled $261 million.
The transaction will merge two highly complementary grocery wholesale organizations with combined sales of approximately $16 billion in 2016, the companies noted. Together, Supervalu and Unified operate 24 distribution centers supplying customers in 46 of the United States and serve a combined customer base of more than 3,000 stores. As it emerges, the combined company can efficiently serve a broad range of independent customers and offer a diverse array of value added services, helping customers compete in an increasingly demanding grocery environment. The acquisition provides new growth opportunities across multiple geographies, including the expansion of Unified’s Market Centre division, a growing business that provides specialty and ethnic products to independent customers.
“We’re thrilled at the opportunity to bring together these two great organizations,” said Mark Gross, Supervalu 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.”