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, 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, president and c.e.o. of Supervalu|