American retail group SuperValu has agreed to acquire grocery wholesaler Unified Grocers for around $375 million.
The deal will create one of the leading grocery wholesale companies in the US, with combined sales in 2016 of approximately $16 billion. Together, SuperValu and Unified Grocers will operate 24 distribution centres and supply customers in 46 states, with combined customer base of over 3,000 stores.
The two companies said that it would ‘bring together two highly complementary organisations’. SuperValu expects to be able to leverage Unified Grocers’ speciality and ethnic food offerings, while Unified will, in turn, benefit from SuperValu’s professional services portfolio.
The purchase price consists of $114 million in cash for all of Unified Grocers’ outstanding shares, as well as $261 million of its debt, and is expected to create run rate synergies for SuperValu of around $60 million within three years.
SuperValu president and chief executive officer Mark Gross said: “We’re thrilled at the opportunity to bring together these two great organisations. By acquiring the Unified business, including gaining a wealth of expertise and talent, we will become a stronger and more efficient organisation. 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, speciality, 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.”
SuperValu currently operates a network of more than 2,000 company-owned, franchised and independently owned stores across the US.
Its acquisition of Unified Grocers comes three months after British retailer Tesco agreed a deal to acquire wholesale group Booker for £3.7 billion, and less than two months after US-based Sonoco Packaging paid $230 million to improve its performance in the fresh produce fixture of US supermarkets with the acquisition of Peninsula Packaging.
SuperValu is not related to the Irish retailer of the same name, which this week reclaimed its position as the largest grocery retailer on the island of Ireland.
SuperValu CEO Gross continued: “We appreciate the experience, intelligence and dedication of the Unified team, and look forward to welcoming Unified associates to SuperValu and supporting them as we continue the important work of contributing to the growth and success of our customer network and helping to deliver value to our stockholders. We will make a great team together.”
Unified Grocers president and CEO Bob Ling added: “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. 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.”
© FoodBev Media Ltd 2017