Supervalu Inc., the owner of Cub Foods, along with four Twin Cities-based independent grocery retailers have each entered into a definitive agreement with Roundy’s to acquire certain Rainbow Foods grocery stores for approximately $65 million, plus inventory. In total, the consortium agreed to acquire 18 Rainbow grocery stores, including 13 Rainbow pharmacies and three Rainbow liquor stores in Minnesota. Jerry’s Enterprises, Haug Enterprises, Lund Food Holdings and Radermacher Enterprises have joined Supervalu in executing these agreements. Once completed, the acquired stores are intended to be operated by Supervalu, a Cub franchisee or an independent retailer as 10 new Cub Foods locations, two new Byerly’s locations and six locations are expected to be operated under the Rainbow banner.
Of the 18 stores, Supervalu will have 100 percent ownership in three Cub stores, majority ownership in two Cub stores, minority ownership in three Cub stores and 100 percent ownership in two Rainbow stores as well as 100 percent ownership interest in 11 pharmacies. Supervalu’s aggregate purchase price across its multiple purchase agreements is approximately $35 million in cash plus the cost of inventory that will be purchased at the closing of the Rainbow store sale. In addition, as part of the transactions, Supervalu will assume certain lease obligations and certain multi-employer pension liabilities related to the stores being acquired by Supervalu.
“Supervalu is thrilled to participate in this consortium of retailers that is acquiring Rainbow stores,” said Sam Duncan, Supervalu’s president and CEO. “We’re especially pleased that highly respected independent retailers here in the Twin Cities are also acquiring Rainbow stores. These independent retailers are great customers to Supervalu who understand the importance of being a strong community grocer.”
Cub Foods consists of a combination of corporate-owned and franchised locations. Following the close of the transactions, Cub Foods will total 66 stores in the Twin Cities and 77 stores banner-wide (including 76 stores in Minnesota and one store in Illinois). As part of acquiring these stores and with seasonal employment needs, Cub Foods expects to make more than 1,000 job offers in the coming months.
“For nearly five decades, Cub Foods has been a trusted grocer and innovator in the Twin Cities,” said Mike Stigers, Cub Foods president. “This community has always been important to us and it is our continued desire to deliver great products, excellent service and an incredible overall value in the grocery store. With more stores under the Cub Foods brand and being serviced out of our distribution center in Hopkins, we will be better positioned to improve our efficiencies and explore ways to bring even stronger value and price competitiveness to our shoppers going forward.”
The transactions are subject to customary closing conditions and are expected to be completed by the end of the summer.
Rainbow stores included in the multiple transactions
The 10 new Cub stores will be located at:
• Chaska: 200 Pioneer Trail
• Eagan: 1276 Town Centre Dr.
• Lakeville: 17756 Kenwood Trail
• Minneapolis (Lagoon): 1104 Lagoon Ave.
• Minneapolis (Quarry): 1540 New Brighton Rd.
• Oakdale: 7053 10th St. North
• Plymouth (6th Avenue): 10200 6th Ave. North
• Roseville (includes stand-alone liquor store): 1201 Larpenteur Ave.
• St. Louis Park (includes stand-alone liquor store): 5370 16th St. West
• St. Paul (Arcade): 892 Arcade St.
The two new Byerly’s stores will be located at:
• Eden Prairie: 970 Prairie Center Dr.
• Woodbury (includes stand-alone liquor store): 7050 Valley Creek Plaza
The six Rainbow stores will be located at:
• Maplewood: 2501 White Bear Ave.
• Minneapolis (Lake Street): 2919 26th Ave. South
• Plymouth (Plymouth Station): 16705 County Rd. 24
• Richfield: 140 West 66th St.
• St. Paul (Midway): 1566 University Ave. West
• West St. Paul: 1660 Robert St. South