Spartan Stores Inc (Nasdaq: SPTN), a regional grocery distributor and retailer; and Nash Finch Company (Nasdaq: NAFC), a leading food distribution company, have entered into a definitive merger agreement under which Spartan Stores and Nash Finch will combine in an all-stock merger valued at approximately $1.3 billion, including existing net debt at each company.
The combination creates a leader in the grocery wholesale, retail, and military commissary and exchange channels with pro forma annual sales of approximately $7.5 billion. Together, Spartan Stores and Nash Finch will have 22 distribution centers covering 37 states, 177 retail stores, and will be the leading distributor to military commissaries and exchanges in the United States. The combined company will also have a portfolio of strong private brands including Spartan Stores’ Spartan brand and Nash Finch’s Our Family and Nash Brothers Trading Company brands.
Under terms of the transaction, which has been unanimously approved by the boards of directors of both companies, Nash Finch shareholders will receive a fixed ratio of 1.20 shares of Spartan Stores common stock for each share of Nash Finch common stock they own. Upon closing, which is expected by the end of calendar 2013, Spartan Stores shareholders will own about 57.7% of the equity of the combined company and Nash Finch shareholders will own about 42.3%.
Dennis Eidson, president and chief executive officer of Spartan Stores, will serve as president and CEO of the combined company. Alec Covington, president and CEO of Nash Finch, will remain with the combined organization in an advisory role to help ensure a smooth transition. The combined company, which will retain a presence in both Minneapolis MN and Grand Rapids MI, will include members of each company’s management teams and employee bases.
Nash Finch’s military business will continue to conduct its operations as before and will remain based in Norfolk VA. Edward Brunot, who currently serves as president of Nash Finch’s military business, will continue to lead that business in the combined organization. Craig Sturken, chairman of Spartan Stores’ board of directors, will serve as chairman of the board of directors of the combined company, which will consist of 12 members, with seven designated by Spartan Stores and five by Nash Finch.
The transaction is subject to customary regulatory approvals and closing conditions, including approval of Spartan Stores and Nash Finch shareholders.
Further information is available at www.nashfinch.com.
