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Safeway to sell Canadian operations to Sobeys

BY Michael Johnsen

PLEASANTON, Calif. — Safeway on Wednesday announced that it has entered into an agreement to sell its Canadian operations through a sale of the net assets of Canada Safeway Limited to Sobeys, a Canadian food retailer and wholly-owned subsidiary of Empire Company Limited, for $5.7 billion in cash plus the assumption of certain liabilities. 

"We are pleased to enter into this agreement with Sobeys in order to realize the higher multiples attributed to Canadian supermarket companies," stated Robert Edwards, president and CEO of Safeway. "The substantial cash proceeds from this transaction will allow us to create value for Safeway stakeholders and contribute to the growth of the ongoing business." 

The transaction has been approved by the boards of directors of both companies. The transaction is anticipated to close in the fourth quarter of 2013 and is subject to customary closing conditions, including approval under the Competition Act in Canada.

The proceeds from this transaction are expected to be used to pay down $2 billion of debt, with the majority of the remainder to be used to buy back stock, Safeway reported. In addition, some of the proceeds may be used to invest in growth opportunities.

In the trailing 12 months ended March 23, Canada Safeway’s revenues were $6.6 billion. In addition, Canada Safeway’s operating profit was $420.3 million and EBITDA was $534.2 million, both adjusted for intercompany related transactions. 

Safeway remains responsible for Canada Safeway’s $294.6 million in public debt due March 2014, which is not included in the transaction, and will also retain cash and other receivables in a similar amount in Canada.

For its part, Sobeys gets a strong and immediate presence in the west of Canada with the addition of Safeway’s 223 stores, including 199 with in-store pharmacies. Also part of the deal are four distribution centers (Sobeys is both competing with and supplying Target in Canada), 62 gas stations, 10 liquor stores and 12 manufacturing plants.

This story has been updated throughout.


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Reports: Coty’s IPO is set to launch

BY Antoinette Alexander

NEW YORK — Coty Inc.’s long-awaited initial public offering is reportedly set to launch with shares to trade on Thursday, according to published reports.

The $1 billion-plus IPO is expected to be a hit, bankers reportedly said. The beauty company will not get any money from the IPO. Majority owner Joh. A. Benckiser will be selling a stake worth $806 million at the upper end of the expected price range, according to reports. Private-equity firms Berkshire Partners and Rhone Capital are selling equal stakes worth $126 million at the upper range.

The Wall Street Journal reported that the deal could raise up to $1.22 billion, including the possible sale of extra shares to underwriters. That would make it the largest U.S.-listed IPO ever for a consumer-products company, according to the WSJ, which cited Dealogic.

Last year, Coty filed to raise as much as $700 million in an IPO. That filing with the Securities and Exchange Commission came about a month after the beauty company dropped its bid for Avon because of Avon’s “delay and unwillingness to engage in discussions.” However, the company ended up postponing the IPO to give its new CEO Michele Scannavini time to acclimate to the post, according to reports.
 

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QS/1 receives controlled substances e-prescribing certification

BY Alaric DeArment

SPARTANBURG, S.C. — Pharmacy automation provider QS/1 has received certification for controlled substances prescribed electronically, the company said.

QS/1 said it received Electronic Prescriptions for Control Substances certification, making it one of the first pharmacy vendors to certify for EPCS in the 10.6 Script Standard.

"Electronic prescriptions are trending upward," QS/1 marketing and analyst senior manager Michael Ziegler said. "Statistics indicate customers are more likely to have their prescriptions filled and picked up if they are sent electronically."

Implementing EPCS requires software certification from Surescripts and the Drug Enforcement Administration; ComplySmart conducted QS/1’s DEA audit. Pharmacists who receive certification will be able to send prescriptions for controlled substances to pharmacies that use QS/1 software, and the company plans to release EPCS in Service Pack 19.1.12.

"QS/1 also added the ability to accept digital signatures within the QS/1 application," Ziegler said. "This will allow for a more streamlined process when digital signatures are required."


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