USA: Supervalu to sell Save-A-Lot for $1.4 billion
Minneapolis-based grocery chain Supervalu said Monday that it had reached a deal to sell grocery discount chain Save-A-Lot to a private equity investor.
Onex Corp. agreed to pay $1.4 billion in cash for Save-A-Lot, which owns 472 stores and licenses naming rights and supplies another 896 locations.
Supervalu, which has 3,342 stores, including the Save-A-Lot locations, said it would use the cash from the transaction to pay down debt.
The company in January had signaled plans to possibly spin off Save-A-Lot into a separate publicly traded company.
“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,” Supervalu non-executive chairman Jerry Storch said in a statement.
Supervalu shares (SVU) rose 8.2% in pre-market trading to $5.42.
Onex Corp. signed a five-year deal for professional services from Supervalu, such as cloud computing, payroll and finance.
Save-A-lot is a “hard-discount” retailer ranging in size from 15,000 square feet to 20,000. Its products include certain national brands and store-only brands, including meats and produce.
Source: USA TODAY
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