SpartanNash (Nasdaq: SPTN) and Caito Foods Service have entered into a definitive agreement under which SpartanNash will acquire certain assets of Caito Foods Service and Blue Ribbon Transport (BRT).
Under terms of the agreement, SpartanNash will acquire Caito’s produce distribution business, fresh cut fruits and vegetables business, the company’s newly constructed Fresh Kitchen facility designed to process and package fresh-prepared foods, and the logistics business of BRT.
The acquisition will strengthen SpartanNash’s product offerings by expanding into the fast-growing freshly prepared centerplate and side dish categories.
Founded in Indianapolis IN in 1965, Caito is a supplier of fresh fruit and vegetables to grocery retailers and food service distributors across 22 states in the Southeast, Midwest and eastern United States. Caito and BRT, which generate combined annual revenues in excess of $600 million, service customers from facilities in Indiana, Ohio and Florida. Caito also has a central fresh cut fruit and vegetable facility in Indianapolis and is completing construction on its new 118,000-square-foot Fresh Kitchen facility, also in Indianapolis.
Caito offers temperature-controlled distribution and logistics services throughout North America via its BRT affiliate.
Caito and BRT will become part of SpartanNash’s food distribution segment after the close of the transaction. Caito’s senior leadership team, including Caito President Robert Kirch and BRT President David Frizzell, will join SpartanNash upon completion of the transaction. Kirch will report to Dave Staples, SpartanNash president and chief operating officer; Frizzell will report to Derek Jones, SpartanNash executive vice-president, president of wholesale and distribution operations. Both will continue in their roles and oversee the acquired operations, which will remain based in Indianapolis.
Under terms of the transaction, SpartanNash will purchase certain assets of Caito and BRT for about $217.5 million in cash, in addition to reimbursing Caito for certain transaction costs and providing two earn-out opportunities that have the potential to pay the sellers another $12.4 million collectively if the business achieves certain performance targets.
SpartanNash expects to close the acquisition by early January 2017, subject to regulatory approval and customary closing conditions.
