United Natural Foods Inc. (UNFI) has completed the $2.9 billion acquisition of Supervalu, creating what officials said would be “America’s premier food wholesaler.”
In connection with the completion, shares of Supervalu have ceased trading on the New York Stock Exchange.
UNFI and Supervalu announced plans to merge in late July, bringing together the largest U.S. natural food and conventional grocery wholesalers, respectively. The deal is expected to deliver more than $175 million in synergies over three years while widening its offering to chains and independent customers.
“Today is an important milestone for UNFI. We will take the best from both businesses to create North America’s premier food wholesaler with significant scale, reach and choices for our customers. We are pleased to welcome our new colleagues from Supervalu as well as their customers and suppliers to UNFI. Our companies share customer-centric cultures and dedicated associates who are committed to continuous improvement, which will help drive our integration programs,” Steve Spinner, UNFI’s chairman and CEO, said in a statement.
As previously reported UNFI’s Sean Griffin will take on the role as CEO of Supervalu and serve as the head of its integration committee. Spinner will lead the combined companies along with an executive team that includes former Supervalu leaders Anne Dament, who will serve as EVP of retail, marketing and private brands, and Mike Stigers, EVP, of wholesale.
The management team also includes current UNFI executives Chris Testa, president of UNFI; Danielle Benedict, chief human resources officer; Eric Dorne, chief administrative officer and chief information officer; Paul Green, chief supply chain officer; Jill Sutton, chief legal officer, general counsel and corporate secretary; and Mike Zechmeister, CFO.
“We are excited to continue to further build out the store to a more diverse customer base across the country, with both broad better-for-you natural, organic brands and fresh perimeter offerings, as we capitalize on opportunities to cross-sell and realize the benefits of the greater scale we now have as a combined company,” Griffin said. “Work has already begun for the company to realize the significant projected run-rate cost synergies associated with this transaction—more than $175 million by year three and more than $185 million by year four—and we are committed to improving profitability into the future. We believe that we can achieve these targets and leverage scalable systems to streamline our processes, more efficiently meet the needs of our customers and reduce future capital expenditures.”
As previously noted, the transaction will be primarily debt financed. UNFI finalized new credit facility agreements, including a $2.1 billion asset-based revolving credit facility, up to $1.475 billion of which will be made available at closing, and a $1.95 billion senior secured first lien term loan facility agreement consisting of a $1.8 billion term loan “B” tranche and a $150 million 364-day tranche. In addition, UNFI’s existing asset-based revolving credit facility was terminated upon close.