Eden Prairie-based grocery wholesaler Supervalu is being acquired by Rhode Island-based United Natural Foods Inc. for about $2.9 billion, the companies announced on Thursday, July 26.
Supervalu is being purchased for $32.50 per share in cash. Both companies’ boards of directors have approved the transaction, which is subject to antitrust approvals, Supervalu shareholder approval and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2018, a news release said.
“UNFI expects to finance the transaction substantially with debt and Goldman Sachs provided committed financing in the transaction. Over time, UNFI plans to divest Supervalu retail assets in a thoughtful and economic manner,” the release said. “Upon closing, UNFI’s net debt-to-EBITDA ratio is expected to be high. With strong cash flows, proceeds from divestitures and commitment to reducing debt, the company anticipates reducing leverage by at least two full turns in the first three years.”
United Natural Foods CEO and Chairman Steven Spinner will lead the combined company. Sean Griffin, United Natural Foods chief operating officer, will oversee the integration of Supervalu, post close and lead an integration committee composed of executives from both companies “to drive the implementation of best practices from each company and the delivery of important synergies and a rapid and smooth integration,” the release said.
Supervalu’s present grocery retail store chains include Cub Foods in the Twin Cities, Hornbacher’s in the Fargo-Moorhead area, Shop ‘N’ Save in St. Louis and Shoppers in Washington, D.C.
Supervalu spokesman Mike Wilken said the company has about 23,000 employees. There are about 9,800 employees in Minnesota, of which about 7,000 are Cub retail employees.
“It’s too early to speculate on what might happen with Supervalu and Cub employees, as well as the corporate offices,” he said in an email.