SuperValu Announces Sale of Save-A-Lot Chain for $1.365 Billion
MINNEAPOLIS, MN – It seems as though the speculated future of the Save-A-Lot chain has finally been decided, as SuperValu Inc. has announced the sale of its banner to private-equity firm Onex Corporation. Onex and SuperValu have reached a definitive agreement for the firm to acquire Save-A-Lot business for $1.365 billion in cash.
“The sale of Save-A-Lot is another important step in SuperValu’s transformation. It provides us with a stronger balance sheet that will allow us to further build on our core strengths and growth opportunities,” said SuperValu President and CEO, Mark Gross. “It has been a pleasure to work with the Save-A-Lot team, and, once this transaction is completed, I look forward to continuing to work with them as one of our largest professional services customers.”
SuperValu first started speculating that it would sell or spinoff its Save-A-Lot chain last year. Amid much debate, rumors surfaced last week that Onex was in talks to acquire the banner. This news today will put the 1,360 stores and sale price of the discount chain at close to SuperValu’s existing market value, according to the Wall Street Journal.
SuperValu reiterated that its focus after the sale will be on grocery wholesale distribution, according to a press release. WSJ projects that while wholesale has only made up 45% of SuperValu’s sales over the past several years, the company now expects that number will grow to over 60%.
“Today’s announcement is the result of a thorough process to maximize the value of the Save-A-Lot business and best position SuperValu for future success,” said SuperValu Non-Executive Chairman of the Board, Jerry Storch. “SuperValu is successfully executing on its long-term strategic vision and positioning the Company for continued growth and value creation. We are confident that this transaction will create exciting opportunities for both SuperValu and Save-A-Lot.”
Since the announcement, SuperValu's stock have risen by 5.19% as of October 17, 2017 at 2:07 pm (EST). The company's price to earning ration is now 9.04.
The sale of the chain is expected to be completed by January 31, 2017. The acquisition is subject to customary closing adjustments, with the companies entering into a five-year professional services agreement. The sale is subject to regulatory approvals and other customary closing conditions.
As announcements continue to roll in regarding the sale of the Save-A-Lot chain, and its impact on the industry, AndNowUKnow will continue to have the latest.