Supervalu Inc. has announced that it will sell its Save-A-Lot discount banner, opting against a public listing. The chain will be sold for $1.37bn to Onex Corp, a Canadian private equity firm.
Save-A-Lot operates around 1,360 stores (both company-owned and franchise) and has consistently been one of the only strong performers in Supervalu’s stable. The sale allows Supervalu to lower its debt level and focus further on its grocery wholesale distribution unit, which accounts for 45% of its total sales.
The deal also includes a professional services agreement through which Supervalu will provide Save-A-Lot with support for day-to-day operations such as cloud services.
Supervalu noted: “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”. After the deal is completed, Supervalu will have annual revenue of around $13bn.