SpartanNash Company completed the acquisition of substantially all of the operating assets of Caito Food Service, Inc. and Blue Ribbon Transport, Inc.
January 06, 2017
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SpartanNash Company (NasdaqGS:SPTN) entered into an asset purchase agreement to acquire substantially all of the operating assets of Caito Food Service, Inc. and Blue Ribbon Transport, Inc. for approximately $240 million on November 3, 2016. The purchase price is subject to working capital and other adjustments. Under the terms of the transaction, SpartanNash will purchase assets of Caito Foods Service and Blue Ribbon Transport for approximately $217.5 million in cash, in addition to reimbursing Caito for $3 million of transaction costs and providing two earn-out opportunities that have the potential to pay the sellers an additional $12.35 million collectively if the business achieves certain performance targets. $15 million of the purchase price will be deposited into an escrow account at closing to secure the indemnification and other obligations of Caito under the purchase agreement. Caito and BRT will become part of SpartanNash's food distribution segment following the close of the transaction. The purchase price will be funded with proceeds from SpartanNash’s asset-based lending facility.
Caito and BRT generate combined annual revenues in excess of $600 million. Caito's senior leadership team, including Caito President Robert Kirch and Blue Ribbon Transport 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. The transaction which is subject to regulatory approval and customary closing conditions is expected to close by early January 2017. As on December 2, 2016, the transaction was approved by the Federal Trade Commission. The transaction is expected to be accretive to full year 2017 Earnings. Brian S. Fennerty of Faegre Baker Daniels LLP acted as the legal advisor for Caito Food Service, Inc. and Blue Ribbon Transport, Inc., and David W. Pollak of Morgan, Lewis & Bockius LLP acted as the legal advisor and Deutsche Bank Securities Inc. acted as the financial advisor for SpartanNash Company (NasdaqGS:SPTN).
SpartanNash Company (NasdaqGS:SPTN) completed the acquisition of substantially all of the operating assets of Caito Food Service, Inc. and Blue Ribbon Transport, Inc. on January 6, 2017.
SpartanNash Company is a food solutions company. It is engaged in distributing grocery products to a diverse group of independent and chain retailers, its corporate-owned retail stores, and United States military commissaries and exchanges; as well as operating a fresh produce distribution network and its Family private label brand. The Company has two segments. Wholesale segment uses a multichannel sales approach to distribute national brands and its own private-branded products to independent retailers, national accounts, food service distributors, e-commerce providers, and its corporate-owned retail stores. The segment also contracts with manufacturers and brokers to distribute a variety of grocery products to 160 United States military commissaries and over 400 exchanges worldwide. Retail segment operates 144 corporate-owned retail stores and 36 fuel centers in nine states in the Midwest, primarily under the banners of Family Fare, Martins Super Markets, and D&W Fresh Market.