Whole Foods Market to merge with Wild Oats
February 22, 2007
by FoodBusinessNews.net Staff
AUSTIN, TEXAS — Whole Foods Market, Inc. and Wild Oats Markets have signed a definitive merger agreement under which Whole Foods will acquire Wild Oats Markets’ outstanding common stock. The purchase price for the acquisition is $18.50 per share, or roughly $565 million based on fully diluted shares.
With the acquisition, Whole Foods Markets will gain critical mass in three of its smallest regions and the company will gain entry into a significant number of new markets. The merger also will give Whole Foods greater purchasing power and additional support facilities.
"Wild Oats Markets and Whole Foods Market have both had a large and positive impact on the natural and organic foods movement throughout the United States, helping lead the industry to nationwide acceptance and to becoming one of the fastest growing segments in food retailing today," said John Mackey, chairman, chief executive officer, and co-founder of Whole Foods Market. "Our companies have similar missions and core values, and we believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members."
With annual sales of approximately $1.2 billion, Wild Oats Markets is one of the leading natural and organic foods retailers in North America. Founded in Boulder, Colo., the company currently operates 110 stores in 24 states and British Columbia, Canada, under four banners: Wild Oats Marketplace, Henry’s Farmers Market, Sun Harvest and Capers Community Market.
Whole Foods said it will evaluate each banner and each store to ensure that it fits into the company’s overall brand and real estate strategy. Store closings of some underperforming locations and relocations of overlapping stores are expected as the company evaluates its new property.
Whole Foods also said it expects to make significant investments in remodeling stores before eventually re-branding them as Whole Foods Market stores.
The merger comes at a time when conventional grocery stores are offering more natural and organic foods in an effort to capitalize on the expanding market.
"As the natural and organic foods industry continues to receive attention from larger conventional players, the timing for our two companies to join forces could not be better," said Gregory Mays, chairman and chief executive officer of Wild Oats Markets. "We believe this strategy is in the best interest of our stakeholders, and our board of directors has unanimously recommended that Wild Oats Markets’ stockholders tender their shares in this offer."