'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

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'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by mbz321 »

https://www.mprnews.org/story/2018/07/2 ... -supervalu

United Natural Foods is buying Supervalu for $1.26 billion, creating a grocery food wholesaler with a diverse customer base.

United Natural Foods of Providence, R.I., said Thursday it's paying $32.50 per share in cash, or a premium of 67 percent, for each share of Supervalu Inc. Including the assumption of debt, the deal is valued at nearly $3 billion.

Over time, the company will divest Supervalu's retail operations, which operate under names including Cub Foods and Hornbacher's.

Eden Prairie-based Supervalu reported separately that quarterly sales rose 35 percent, with wholesale sales up 49 percent. The company swung to a first-quarter loss of $21 million, or 70 cents per share.

In premarket trading, Supervalu shares soared 63 percent to $31.85. The stock had been down 22 percent in the past year.
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by bm11k »

http://www.wday.com/business/retail/447 ... -supervalu

No changes to Hornbacher's, for now

as for a buyer, I could see Kroger or Hy-Vee (especially Hy-Vee for some of the Cub stores) not sure about Horhbacher's as I live in Fargo they are somewhat pricey in center store, produce and meat are so-so. but dairy is where they really shine.
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by pseudo3d »

mbz321 wrote: July 26th, 2018, 8:30 am https://www.mprnews.org/story/2018/07/2 ... -supervalu

United Natural Foods is buying Supervalu for $1.26 billion, creating a grocery food wholesaler with a diverse customer base.

United Natural Foods of Providence, R.I., said Thursday it's paying $32.50 per share in cash, or a premium of 67 percent, for each share of Supervalu Inc. Including the assumption of debt, the deal is valued at nearly $3 billion.

Over time, the company will divest Supervalu's retail operations, which operate under names including Cub Foods and Hornbacher's.

Eden Prairie-based Supervalu reported separately that quarterly sales rose 35 percent, with wholesale sales up 49 percent. The company swung to a first-quarter loss of $21 million, or 70 cents per share.

In premarket trading, Supervalu shares soared 63 percent to $31.85. The stock had been down 22 percent in the past year.
Big news. Never heard of this company, they're either biting off more than they can chew or SuperValu is more worthless than I thought. I can't see any good things for the remaining SuperValu chains...Kroger has never seemed willing to bite on Cub Foods, probably owing to the whole distribution issue (doubt they would now) and a Hy-Vee buyout would end up leaving a lot of stores dark.
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by klkla »

pseudo3d wrote: July 26th, 2018, 2:59 pmBig news. Never heard of this company, they're either biting off more than they can chew or SuperValu is more worthless than I thought. I can't see any good things for the remaining SuperValu chains...Kroger has never seemed willing to bite on Cub Foods, probably owing to the whole distribution issue (doubt they would now) and a Hy-Vee buyout would end up leaving a lot of stores dark.
I see their trucks here in SoCal frequently. They supply products to Whole Foods, Sprouts, Bristol Farms and Gelson's that I know of. Probably a lot of others, as well.

Whole Foods is their biggest client so perhaps this is an attempt at diversification in case Amazon decides to cut them off at some point in the future.
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by babs »

pseudo3d wrote: July 26th, 2018, 2:59 pm
mbz321 wrote: July 26th, 2018, 8:30 am https://www.mprnews.org/story/2018/07/2 ... -supervalu

United Natural Foods is buying Supervalu for $1.26 billion, creating a grocery food wholesaler with a diverse customer base.

United Natural Foods of Providence, R.I., said Thursday it's paying $32.50 per share in cash, or a premium of 67 percent, for each share of Supervalu Inc. Including the assumption of debt, the deal is valued at nearly $3 billion.

Over time, the company will divest Supervalu's retail operations, which operate under names including Cub Foods and Hornbacher's.

Eden Prairie-based Supervalu reported separately that quarterly sales rose 35 percent, with wholesale sales up 49 percent. The company swung to a first-quarter loss of $21 million, or 70 cents per share.

In premarket trading, Supervalu shares soared 63 percent to $31.85. The stock had been down 22 percent in the past year.
Big news. Never heard of this company, they're either biting off more than they can chew or SuperValu is more worthless than I thought. I can't see any good things for the remaining SuperValu chains...Kroger has never seemed willing to bite on Cub Foods, probably owing to the whole distribution issue (doubt they would now) and a Hy-Vee buyout would end up leaving a lot of stores dark.
UNFI is a huge company. Many larger chains outsource their natural and organic foods buying to UNFI since so many of these products come from smaller producers or sell in smaller volumes to the point where it doesn't make sense for the chains to use their own DCs. I believe Kroger uses UNFI but Safeway uses Kehe instead.

My guess is that this is a diversification move by UNFI. It's also possible that they sell the individual chains for nearly the amount they spent to buy the entire company. It's a bold move that could pay off in the long run.
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by storewanderer »

babs wrote: July 26th, 2018, 4:13 pm
pseudo3d wrote: July 26th, 2018, 2:59 pm
mbz321 wrote: July 26th, 2018, 8:30 am https://www.mprnews.org/story/2018/07/2 ... -supervalu

United Natural Foods is buying Supervalu for $1.26 billion, creating a grocery food wholesaler with a diverse customer base.

United Natural Foods of Providence, R.I., said Thursday it's paying $32.50 per share in cash, or a premium of 67 percent, for each share of Supervalu Inc. Including the assumption of debt, the deal is valued at nearly $3 billion.

Over time, the company will divest Supervalu's retail operations, which operate under names including Cub Foods and Hornbacher's.

Eden Prairie-based Supervalu reported separately that quarterly sales rose 35 percent, with wholesale sales up 49 percent. The company swung to a first-quarter loss of $21 million, or 70 cents per share.

In premarket trading, Supervalu shares soared 63 percent to $31.85. The stock had been down 22 percent in the past year.
Big news. Never heard of this company, they're either biting off more than they can chew or SuperValu is more worthless than I thought. I can't see any good things for the remaining SuperValu chains...Kroger has never seemed willing to bite on Cub Foods, probably owing to the whole distribution issue (doubt they would now) and a Hy-Vee buyout would end up leaving a lot of stores dark.
UNFI is a huge company. Many larger chains outsource their natural and organic foods buying to UNFI since so many of these products come from smaller producers or sell in smaller volumes to the point where it doesn't make sense for the chains to use their own DCs. I believe Kroger uses UNFI but Safeway uses Kehe instead.

My guess is that this is a diversification move by UNFI. It's also possible that they sell the individual chains for nearly the amount they spent to buy the entire company. It's a bold move that could pay off in the long run.
I think Kroger is self distributing a lot more of these items now through their non food and specialty distribution centers (Peytons etc.). Safeway/Albertsons (also Save Mart in NorCal) heavily use Kehe.

I think this move will pay off for UNFI. It will also be good for independents as it will open them up to a larger network of specialty products by way of UNFI. I suspect many independents were already using UNFI for some items and it may have been difficult to make it work due to the small volume of those items they were selling. This should make it easier for them if SVU and UNFI get linked for distribution.

Maybe next Amazon will just buy UNFI... how interesting that would be.
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by pseudo3d »

babs wrote: July 26th, 2018, 4:13 pm
My guess is that this is a diversification move by UNFI. It's also possible that they sell the individual chains for nearly the amount they spent to buy the entire company.
I don't think that SuperValu's grocery holdings are worth a billion dollars or anywhere close to that. If they were, they probably wouldn't have sold out for a pittance (reminder that this is the same company that bought part of Albertsons for eight times the amount they would end up selling themselves for, unaccounted for inflation, and the same amount that they sold Save-a-Lot for). I can't see Hy-Vee pulling a Publix and buying the 81-store Cub chain for $500 million as Publix did for the 49 Albertsons, and that's the most valuable property--whatever Shop N Saves they have hanging around, as well as what's left of Shoppers is not going to net UNFI anywhere close to a billion dollars. Obviously, UNFI didn't buy SuperValu for their retail holdings, but they did say "over time" which implies UNFI isn't in a hurry to dump them (at least not Cub).
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by marshd1000 »

Since Cerebus owns some Supervalu stock, do you think Albertsons, could make a play for some of the chains, or at least Cub?
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by pseudo3d »

marshd1000 wrote: July 28th, 2018, 5:38 am Since Cerebus owns some Supervalu stock, do you think Albertsons, could make a play for some of the chains, or at least Cub?
Not at the rate they're going unless Rite Aid falls through. The number of stores SuperValu owns now is so few and low-end that at most I can see Safeway Eastern getting a few Shoppers.
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Re: 'United Natural Foods to buy Eden Prairie-based Supervalu for $1.26 billion'

Post by bm11k »

http://www.startribune.com/cub-executiv ... 499446901/

Looks like they are looking to sell Cub as a whole
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