Supervalu to sell grocery discount chain Save-A-Lot to Onex Corp for $1.37 bn
18 Oct 2016
US grocery chain Supervalu Inc yesterday struck a deal to sell its grocery discount chain Save-A-Lot business to Canadian private equity firm Onex Corp for $1.37 billion in cash.
Onex Corp will buy Save-A-Lot, which owns 472 stores and licenses naming rights and supplies another 896 locations.
Under the terms of the deal, 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.
The Minneapolis-based company expects to use the net proceeds from the sale to prepay at least $750 million debt and use the remaining to further reduce debt and improve its capital structure, as well as to fund corporate and growth initiatives.
Today's announcement is the result of a thorough process to maximise the value of the Save-A-Lot business and best position SUPERVALU for future success,'' said Jerry Storch, non-executive chairman of Supervalu.
Save-A-Lot is one of the largest discount grocery retailers in the US having its own 472 stores, and supplies another 896 licensee-owned stores across the country
With more than 1,300 stores in urban, suburban, and rural areas, Save-A-Lot reaches more than 5 million shoppers each week. The stores provide a limited selection of national and exclusive store brand products with a focus on its fresh offerings including USDA-inspected beef, pork and poultry, and farm-fresh fruits and vegetables.
The deal is expected to close by 31 January 2017.
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