SuperValu to Acquire Unified Grocers in United States

Eden Prairie, Minnesota-headquartered SuperValu Inc. announced on April 10 that it has entered into a definitive merger agreement to purchase Commerce, California-based Unified Grocers. The proposed transaction, valued at approximately $375 million, is comprised of about $114 million in cash for 100% of the outstanding stock of Unified Grocers, plus the assumption and pay-off of its net debt at closing (approximately $261 million as of April 1, 2017).

This deal will bring together two highly complementary grocery wholesale organizations in the USA with combined sales of $16 billion in 2016. Together they operate 24 distribution centers supplying customers in 46 states and serve a combined customer base of over 3,000 stores. The combined company will be positioned to efficiently supply a broad range of independent customers and offer a diverse array of value-added services.

The acquisition also provides new growth opportunities across multiple geographies, including the expansion of Unified’s Market Centre division, a growing business providing specialty and ethnic products to independent customers.

supervaluSuperValu expects that by the end of the third year of operations after completion of the transaction the business will achieve a run rate of at least $60 million in cost synergies. These synergies will be primarily derived from utilizing the scale and expertise of the combined company, as well as consolidation of select back office functions.

Employing approximately 30,000 people, SuperValu is ranked as one of the largest grocery wholesalers and retailers in the United States with annual sales of approximately $13 billion. It serves customers across the nation through a network of 2,067 stores composed of 1,850 units operated by wholesale customers serviced primarily by the company’s food distribution business, 195 traditional retail grocery stores operated under five retail banners, and 22 stores under the Shop 'N Save name in Maryland, Pennsylvania, Virginia, and West Virginia.

Unified Grocers, founded in 1922, is a retailer-owned wholesale grocery distributor that supplies independent retailers throughout the western United States. The company has annual sales of approximately $3.8 billion and serves its members and customers through six distribution centers, as well as Market Centre, a dedicated specialty, natural and ethnic business. Unified owns approximately three million square feet of real estate.


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