Last updated on March 25th, 2021 at 07:24 pm
Supervalu has entered into a definitive agreement whereby an affiliate of Onex Corp. will acquire Supervalu’s Save-A-Lot business for $1.365 billion in cash, subject to customary closing adjustments. In connection with the sale, Supervalu and Save-A-Lot will enter into a five-year professional services agreement. The sale of Save-A-Lot is expected to be completed by Jan. 31, 2017, subject to regulatory approvals and other customary closing conditions.
“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.”
Added Supervalu President and CEO Mark Gross, “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. 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.”
Under the terms of the professional services agreement, Supervalu will provide Save-A-Lot with certain services and support functions for its day-to-day operations, including cloud services, merchandising technology, payroll, finance, and other technology and hosting services.
Supervalu expects to use the net proceeds from the sale to prepay at least $750 million against its outstanding term loan balance. The company intends to use the remaining net sale proceeds to further reduce debt and improve its capital structure, as well as to fund corporate and growth initiatives.
