Supervalu has announced a deal to acquire Unified Grocers for $375m (including debt), bringing together two major grocery wholesalers.
The combined entity’s wholesale operations will comprise of 24 distribution centres across 46 US states, which will serve 3,000 stores and generate sales of around $11.8bn (Supervalu’s retail unit has additional sales of $4.8bn).
The deal, which is expected to be completed by end-summer, will see Unified Grocers become a wholly-owned subsidiary of Supervalu. It also marks the latter’s entry into the US West Coast, as its current distribution operations are confined to the Midwest US and parts of the East and Southeast.
The deal is expected to generate at least $60m in synergies by the end of the third year after the deal is completed, mainly due to the scale and expertise of the new group and the consolidation of some back-office functions. Supervalu also expects to incur costs of up to $60m within the first two years following the completion of the deal. Supervalu will also aim to expand Unified’s Market Centre division, which supplies speciality, ethnic and wellness products.
Mark Gross, CEO of Supervalu, noted: “We’re thrilled at the opportunity to bring together these two great organisations. By acquiring the Unified business, including gaining a wealth of expertise and talent, we will become a stronger and more efficient organisation.”
- Just about time for suppliers to check and harmonise any prices and terms disparities…