C&S Wholesale acquires Penn Traffic business
December 23, 2008
by FoodBusinessNews.net Staff
KEENE, N.H. — C&S Wholesale Grocers, Inc., the second-largest wholesaler in the United States, has acquired the wholesale business segment and related accounts receivable from The Penn Traffic Co. for $43 million.
In finalizing the sale, Penn Traffic said it will be completing the pay down of $32 million, or 62% of its outstanding funded debt, by its fiscal year-end, using proceeds from the wholesale divestiture as well as from two recently announced store sales. The company plans to pay down its $17 million revolving line of credit to zero and approximately $15 million of the company’s $25 million supplemental real estate facility. The company’s $6 million term loan will continue to remain outstanding.
The transaction is expected to allow Penn Traffic to focus its attention on its 91 retail stores in Upstate New York, Pennsylvania, Vermont and New Hampshire. Earlier this year the company closed its Penny Curtiss commercial baking business.
"Penn Traffic enters the new year as a renewed company, squarely focused on our P&C, Quality and BiLo banners and the consumers they serve," said Gregory J. Young, president and chief executive officer. "I am confident that today Penn Traffic is a stronger company with a brighter future than it had one year ago. Our work continues. Our team is committed to rebuilding the company during what may be the most challenging recession our industry, communities and customers have faced in generations.
"The wholesale divestiture and debt reduction we’ve just completed are the latest steps forward, and demonstrate the actions we continue to take as part of our strategy to rebuild the company, restore profitability and position Penn Traffic for long-term success."