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Gross to Depart Supervalu Following UNFI Deal

Dealmaker who engineered retailer/distributor's transformation will exit after Q4 deal closure
Supervalu

Mark Gross, the dealmaker who engineered Supervalu’s high-speed transformation and outran activist investors before agreeing to sell the company to a smaller rival this week, will depart Supervalu upon its acquisition by United Natural Foods.

Documents filed with the Securities and Exchange Commission detailed an agreement whereby Gross will be prohibited from engaging in activities relating to the grocery wholesale business and Supervalu’s grocery retail businesses from a period of 12 to 24 months following the execution of the sale agreement, expected to close in the fourth quarter.

UNFI said its COO, Sean Griffin, would oversee Supervalu and its integration following the deal.

Gross joined Supervalu as its CEO in February 2016, succeeding Sam Duncan, and embarked upon a strategic plan to transform the company behind its core wholesaling business. That differentiated him from any number of predecessors at the Minneapolis-based company that sought to diversify that base through retail.

His tenure at the company included a disposal of the owned discount chain Save-A-Lot, which went to the Canadian private equity firm Onex in 2016 for $1.36 billion. That sale came after an attempt by predecessors to spin off Save-A-Lot as a publicly traded company failed.

Supervalu then went on an acquisition spree, acquiring rivals Unified Grocers and Associated Grocers of Florida, adding more than $5 billion in annual sales to grow wholesale to nearly $13 billion. The company also added new wholesale accounts including chains such as The Fresh Market, while further unwinding the company’s retail sales base, a tricky proposition because its wholesale efficiency relied in part on keeping sales in the system.

Gross came to Supervalu after leading his own consulting firm, Surrey Investment Advisors, after a decade at C&S Wholesale Grocers, including a stint as its president.

In a conference call discussing the UNFI sale Thursday, Gross highlighted greater scale and efficiency benefits for independent customers and availability for natural/organic and specialty items carried by UNFI.

“We see this transaction about access, and how we make sure our combined base has access to the best of both companies to meet the changing needs and underlying trends in the market," Gross said. "The true excitement of this deal lies in creating a one-of-a-kind company that truly did not exist before.”

In messages to employees and vendors issued upon the announcement of the deal Thursday, Gross emphasized that Supervalu would operates independently until the deal is complete.

“We are confident that the combination of UNFI’s expertise and on-trend product offerings with Supervalu’s dynamic customer base, efficient supply chain model and supporting services will create a groundbreaking company that will deliver exciting opportunities for all of our stakeholders, including an unmatched ability to meet customers’ evolving needs and the ability for us and our vendors to efficiently serve a varied customer base,” the company told vendors.

 

 

 

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