American wholesaler Supervalu Inc. announced Monday that it had sold its Save-A-Lot business to private equity company Onex Corporation for $1.37 billion, subject to closing adjustments.
The retailer will continue providing certain 'back office' services to Save-A-Lot for five years after the sale.
“With the successful completion of the Save-A-Lot sale, we are well positioned for the future with a stronger balance sheet, the opportunity to more strategically invest in our business, and the ability to more keenly focus on our core business as a leading grocery wholesaler,” said Supervalu president and CEO, Mark Gross.
Just over half of the proceeds from the sale will go to pay for a portion of its outstanding term loan balance. The remaining profit will go towards other debt, improving its capital structure, improving its pension plan, and funding growth initiatives.
Following the sale of Save-A-Lot, the company will be re-structured into wholesale and retail segments. Supervalu is one of the largest wholesalers and retailers in the U.S., with annual sales of around $13 billion.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. To subscribe to ESM: The European Supermarket Magazine, click here.
