Save-A-Lot food stores
Supervalu plans to sell its Save-A-Lot business to an affiliate of Onex Corp. for $1.365 billion in cash.

MINNEAPOLIS — Supervalu Inc. announced on Oct. 17 a definitive agreement to sell its Save-A-Lot business to an affiliate of Onex Corp. for $1.365 billion in cash. Customary closing adjustments will apply to the acquisition. Supervalu and Save-A-Lot will enter into a five-year professional services agreement in connection with the sale. Completion is expected by Jan. 31, 2017, and is subject to regulatory approvals and customary closing conditions.

The terms of the professional services agreement include Supervalu providing Save-A-Lot with certain services and support for day-to-day operations such as cloud services, merchandising technology, payroll, finance, and other technology and hosting services.

Jerry Storch, SuperValu
Jerry Storch, non-executive chairman of the Supervalu board

“Today’s announcement is the result of a thorough process to maximize the value of the Save-A-Lot business and best position Supervalu for future success,” said Jerry Storch, non-executive chairman of the board. “Supervalu is successfully executing on its long-term strategic vision and positioning the company for continued growth and value creation. We are confident that this transaction will create exciting opportunities for both Supervalu and Save-A-Lot.”

Supervalu plans to use proceeds from the sale to prepay $750 million or more against its outstanding term loan balance. It will use the remaining proceeds to further reduce debt, improve its capital structure and fund corporate and growth initiatives.

Mark Gross, SuperValu
Mark Gross, president and c.e.o. of Supervalu
“The sale of Save-A-Lot is another important step in Supervalu’s transformation. It provides us with a stronger balance sheet that will allow us to further build on our core strengths and growth opportunities,” said Mark Gross, president and chief executive officer of Supervalu. “It has been a pleasure to work with the Save-A-Lot team, and, once this transaction is completed, I look forward to continuing to work with them as one of our largest professional services customers.”