We are actively exploring opportunities to minimize liabilities associated with SVU legacy businesses, including retail business lines. “I feel extremely comfortable that we will find our way through the retail divestiture in a time frame that certainly we're comfortable with, and I think that still remains within a year of making the [Supervalu] acquisition,” he said. What are the closing conditions for this transaction? When is this transaction expected to close? Yes, the details are provided in the merger agreement, which was filed on July 26. Have you spoken to your largest shareholders?
The transaction is subject to approval by SUPERVALU stockholders and customary closing conditions including antitrust regulatory approval. You can keep it if you leave your current employer. In fact, this transaction will enable us to expand these better-for-you products into new channels. And will UNFI have access to a broader customer base for natural foods products? Is there a breakup fee? The company, headquartered in the Minneapolis suburb of Eden Prairie, Minnesota, has been in business since 1926. Upon closing, UNFI’s net debt-to-EBITDA ratio is expected to be high. What is the strategic rationale? One of our representatives will contact you shortly. Do you expect any antitrust or regulatory issues?
No.
Do you expect to lose customers or suppliers following this transaction? For the natural/organic distributor, the purchase of Supervalu expands its geographic reach and customer base, including across more retail channels. Do you expect revenue synergies as well? In addition, SVU has agreed to cooperate with and provide assistance to UNFI in connection with its financing efforts. Supervalu distributes to those customers from its 29 distribution facilities, many of which are located in areas that are not covered by UNFI’s current footprint. With strong cash flows, proceeds from divestitures and commitment to reducing debt, the company anticipates reducing leverage by year three. They also come with a highly scalable technology infrastructure. Why now? The wider geographic reach and greater scale resulting from the acquisition is expected to increase efficiencies and effectiveness, which we also expect will stabilize and increase margins over time. The combination will enable us to serve a larger and more diverse customer base with a broader range of products particularly in high growth categories such as produce and protein.
These synergies will be derived from implementing the best practices of each organization with the intent to unlock process and resource improvements therefore enhancing overall efficiency and productivity. Please complete the form below and a member of our team will contact you. We will announce the related details of such divestitures, in due course. “We’ve been extremely successful, quite frankly more successful than I thought we would be at this point in time. The combined company is expected to benefit from new revenue opportunities derived from the expanded product offering and customer base. Long-term guidance will be provided on our fourth quarter fiscal 2018 call in September.
How fast do you plan on divesting? UNFI is the largest distributor of natural and organic products in the U.S. and Canada, and SuperValu is the largest publicly traded food wholesaler in the U.S.
“Today, we're the No. Would we prefer to be operating today with less leverage? Still, Spinner acknowledged that Supervalu was “no perfect acquisition.” The Minneapolis-based wholesaler was struggling financially, trying to sell off its retail business, and had just completed large-scale integrations of acquired Unified Grocers and Associated Wholesale Grocers of Florida.
There's lots of opportunities across so many places.”. Delivers significant synergies: Through this combination, UNFI will be positioned to realize run rate cost synergies of more than $175 million by year three. Yes. This will enable UNFI and SUPERVALU to address evolving customer needs through enhanced distribution capabilities, as well as a diversified offering across both natural, organic and specialty and conventional products. UNFI expects to finance the transaction substantially with debt. The greater scale of the combined company is expected to enable us to achieve significant synergies by driving further efficiencies in our distribution network and infrastructure. The foregoing list of factors is not exclusive. We do not anticipate this announcement to affect our customer contracts. Will UNFI continue to supply Amazon / Whole Foods Market? Supermarket News is part of the Informa Connect Division of Informa PLC. Would we have preferred not to acquire retail?
Well, with the acquisition of Supervalu, we now have a path to $30 billion in revenue and $1 billion in EBITDA. The combination will enable us to serve a larger and more diverse customer base with a broader range of products particularly in high growth categories such as produce and protein. UNFI expects to finance the transaction substantially with debt and Goldman Sachs provided committed financing in the transaction. UNFI will acquire SUPERVALU for $32.50 per share in cash, or approximately $2.9 billion, including the assumption of outstanding debt and liabilities. Would we have preferred to take on less pension liability? We have discussed with shareholders and will continue to provide more information, in accordance with our normal cadence the compelling strategic and financial logic of this transaction.
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