News

Supervalu completes deal with AB Acquisition

BY Michael Johnsen

MINNEAPOLIS — Supervalu on Thursday announced the completion of the sale of its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies to AB Acquisition LLC, an affiliate of a Cerberus Capital Management-led investor consortium, in a stock deal valued at $3.3 billion, including $100 million in cash and $3.2 billion in debt assumption. 

“The successful completion of this transaction marks a significant milestone for Supervalu and our shareholders, customers and employees,” stated Sam Duncan, Supervalu president and CEO. “As we move forward, Supervalu will continue as one of the largest wholesale grocery providers in America serving nearly 2,000 independent retailers in 43 states; we plan to continue growing our hard discount Save-A-Lot format that includes over 1,300 stores nationwide; and we will operate five, strong regional retail banners.”

Operations for these banners will transfer overnight, and the new Supervalu will open for business on Friday as a more efficient wholesale and retail company with annual sales of approximately $17 billion.

As part of the transaction, Supervalu also announced that Symphony Investors, a Cerberus-led investor consortium, completed its tender offer resulting in the acquisition of 11.7 million shares at a purchase price of $4.00 per share in cash. In addition, pursuant to the terms of the transaction, the company issued 42.5 million new shares of common stock (approximately 19.9% of the outstanding shares) to Symphony Investors at a purchase price of $4.00 per share in cash to the company, or approximately $170 million. The tender offer and primary stock issuance establish Symphony Investors as Supervalu’s largest shareholder with 21.2% of total outstanding common shares.

With the close of the SUPERVALU Supervalu, Robert Miller, president and CEO of Albertsons LLC, becomes Supervalu’s new non-executive chairman replacing Wayne Sales, who has served as executive chairman since August 2012. Supervalu also announced that Sales will remain on the board as a director along with four other current board members — Donald Chappel, Irwin Cohen, Philip Francis and Matthew Rubel. As previously agreed upon by Supervalu and Symphony Investors, five directors voluntarily resigned from the Board effective today, including Ronald Daly, Susan Engel, Edwin “Skip” Gage, Steven Rogers and Kathi Seifert.

Lenard Tessler, a designee of Symphony Investors, also was appointed to the Supervalu board of directors today. He currently serves as co-head global private equity and senior managing director of Cerberus Capital Management. Prior to joining Cerberus in 2001, Tessler served as managing partner of TGV Partners from 1990 to 2001, a private equity firm that he founded. 

The seven-person board resulting from today’s transaction will have four members who are independent directors under the New York Stock Exchange listing standards. This seven-person board will now identify two additional independent directors. Upon the selection and appointment of these two directors, Duncan and Mark Neporent, a designee of Symphony Investors, will join the board increasing its final size to 11 directors.

Neporent is the chief operating officer and general counsel for Cerberus Capital Management, positions he has held with the firm since 1998. He is responsible for the day-to-day management of the firm. 

Supervalu also confirmed that it has closed on a $1 billion asset based revolving credit facility led by Wells Fargo, US Bank and Rabobank and a $1.5 billion term loan secured by a portion of the Company’s real estate, equipment and an equity pledge of Moran Foods (the parent entity of the Save-A-Lot business) led by Goldman Sachs Bank USA, Credit Suisse, Morgan Stanley, Bank of America Merrill Lynch and Barclays. The proceeds of these financings replaced a previous $1.7 billion asset-based revolving credit facility, an existing $834 million term loan and a $200 million receivables financing facility and refinanced $490 million of 7.5% bonds scheduled to mature in November 2014.


Like this story? Find us on Facebook for more insight, analysis and the latest in drug store news. Join the conversation.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon’s entry would shake up the most?
News

Rite Aid raises record-breaking amount for Children’s Miracle Network

BY Alaric DeArment

CAMP HILL, Pa. — Rite Aid raised $5.9 million for Children’s Miracle Network Hospitals in 2012, the retail pharmacy chain said.

The company said the amount marked a record and was 41% higher than the year before. Rite Aid has supported the organization for 18 years, and the money funds critical care, research and equipment at 95 Children’s Miracle Network Hospitals in communities served by Rite Aid.

"Rite Aid hit a fundraising milestone in 2012 by raising a record-breaking amount of vital funds for local children’s hospitals," Children’s Miracle Network hospitals president and CEO John Lauck said. "We are grateful for our long-standing partnership with Rite Aid and the amazing efforts of Rite Aid associates nationwide."

2012 also marked the first-ever mobile and social media campaign for the organization, allowing customers to donate via mobile text messaging and the company’s Facebook page in addition to purchasing paper Miracle Balloons. Funding was also raised through events such as plant sales, fishing trips and bowling matches.

"Each year, Rite Aid associates give their all when it comes to fundraising for Children’s Miracle Network Hospitals and this year, the results of their efforts were truly phenomenal," Rite Aid COO and Rite Aid Foundation president Ken Martindale said.


Like this story? Find us on Facebook for more insight, analysis and the latest in drug store news. Join the conversation.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon’s entry would shake up the most?
News

Report: Albertsons expected to be reunited under one operator on Thursday

BY Antoinette Alexander

BOISE, Idaho — Supervalu’s sale of Albertsons stores to Cerberus Capital Management will reportedly close Thursday at midnight, according to a published report by StateImpact Idaho.

In January, Supervalu announced a definitive agreement under which it will sell 877 stores across the Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market banners and related Osco and Sav-on in-store pharmacies to AB Acquisition, an affiliate of Cerberus Capital Management, in a transaction valued at $3.3 billion. The move reunites all Albertsons stores under one operator.

According to the StateImpact Idaho report, a Supervalu spokesman disputed that the Albertsons deal will be finalized by midnight on Thursday and said the sale is expected to be complete “some time this week.”

 

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon’s entry would shake up the most?