Shoppers To Oversee Farm Fresh Merch; Parent SVU To Buy Unified

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“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,” said Bob Ling, Unified Grocers’ president and CEO. “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.”

The transaction, which was unanimously approved by each company’s board of directors, is currently expected to close in mid-to-late summer 2017, subject to approval by Unified’s shareholders and other customary closing conditions. Following completion of the merger, Unified Grocers will be a wholly-owned subsidiary of SUPERVALU.

Following the completion of the transaction, Supervalu, with its headquarters in Eden Prairie, MN, will maintain an important and visible presence in Commerce, CA, Unified’s headquarters, and throughout the West Coast, including management and employees of the combined company.

Supervalu said it expects that by the end of the third year of operations after the completion of the transaction, the combined 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. To achieve these synergies, SUPERVALU expects to incur transition and integration costs of up to $60 million within the first two years following the completion of the transaction. The transaction is expected to be accretive to earnings per share, excluding the transition and integration costs as well as potential purchase accounting adjustments, in the first full fiscal year following closing which begins on February 25, 2018.

RBC Capital Markets, LLC acted as Supervalu’s financial advisor and Faegre Baker Daniels LLP and Cleary Gottlieb Steen & Hamilton LLP acted as Supervalu’s legal counsel. Moelis & Company LLC acted as financial advisor to Unified Grocers and Sullivan & Cromwell LLP acted as Unified’s legal counsel.

Supervalu is one of the largest grocery wholesalers and retailers in the U.S. with annual sales of approximately $13 billion. serving customers across the United States through a network of 2,067 stores composed of 1,850 stores 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 (store counts as of December 3, 2016).

Founded in 1922, Unified Grocers is a retailer-owned wholesale grocery distributor that supplies independent retailers throughout the western United States. Unified and its subsidiaries offer independent retailers all the resources they need to compete in the supermarket industry. Unified Grocers 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 3 million square feet of real estate.