Spartan Stores and Nash Finch Agree to Merge

Spartan Stores Inc., a regional grocery distributor and retailer based in Grand Rapids, Mich., and Minneapolis-based Nash Finch Co., a food distribution company, said they 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, the companies said, with pro forma annual sales of approximately $7.5 billion. Together, Spartan Stores and Nash Finch will have 22 distribution centers covering 37 states and 177 retail stores. The combined company also will be the leading distributor to military commissaries and exchanges in the United States.

Spartan Stores and Nash Finch also said the combined company will have significant scale and geographic reach to provide value-added distribution services to a diversified customer base and drive new growth opportunities through increased customer penetration, new customer additions and expansion into new market segments. In addition, it will have a comprehensive portfolio of strong private brands, including Spartan Stores’ Spartan brand and Nash Finch’s Our Family and Nash Brothers Trading Company brands.

Upon closing, which is expected by the end of calendar 2013, Spartan Stores shareholders will own approximately 57.7 percent of the equity of the combined company, and Nash Finch shareholders will own approximately 42.3 percent, the companies said.

“This transformational transaction provides a unique opportunity to bring together Spartan Stores’ grocery distribution and retail operations in Michigan, Indiana and Ohio with Nash Finch’s leading position in grocery distribution to military commissaries and exchanges and its complementary wholesale grocery network throughout the U.S,” said Dennis Eidson, president and CEO of Spartan Stores. “Together, we will create one of the premier grocery wholesaler and retail operators, with a comprehensive portfolio of high-quality private brands, nationwide distribution services and a strong platform for future growth.”

Alex Covington, president and CEO of Nash Finch, said the transition fits the company’s vision of becoming “the largest and most admired food distributor” in the United States.

“The complementary operations and outstanding strategic fit of these two companies create significant value for both companies’ shareholders,” he said. “Our shared vision to provide best-in-class services to our wholesale customers and attractive formats for our retail consumers, as well as our continued commitment to serving our nation’s military heroes and their families, at home and abroad, creates a powerful platform for growth over the long term.”

Eidson will serve as president and CEO of the combined company, while Covington will remain with the organization in an advisory role to help ensure a smooth transition, the companies noted. The combined company, which will retain a presence in both Minneapolis and Grand Rapids, will include members of each company’s experienced management teams and employee bases. Nash Finch’s military business will continue to conduct its operations as it has in the past and will remain based in Norfolk, Va.