Leading food distributor
Nash Finch Company
) and leading grocery distributor
Spartan Stores Inc.
) have agreed to join forces and form a combined entity. The $1.3
billion definitive merger agreement will close by the end of
The merger will form a leading wholesale and food distributor
boasting a total of 22 distribution centers covering 37 states
and 177 retail stores. Moreover, the new company will command a
strong portfolio of private brands including Spartan Stores'
Spartan, Family Fare and Valu Land brands and Nash Finch's Our
Family and Nash Brothers Trading Company brands. The deal will
give the combined company a larger profile, with annual sales of
about $7.5 billion.
The merger is expected to generate $50 million annual cost
synergies and involve a one-time integration cost of $26 million
within three years.
The all-stock merger also holds that Nash Finch shareholders
will receive a fixed ratio of 1.20 shares of Spartan Stores for
each Nash Finch share. Spartan Stores' shareholders will own
approximately 57.7% of the equity of the combined entity and Nash
Finch shareholders will own approximately 42.3%. The combined
company will pay an annual dividend of 48 cents to its
Dennis Eidson, President and Chief Executive Officer (CEO) of
Spartan Stores, will continue to serve in the same position at
the combined company. Alec Covington, President and CEO of Nash
Finch, will take up an advisory position in the combined entity
to smoothen the transition.
The merger will enable the companies to complement each other
because of their similar nature. Spartan Stores will help Nash
Finch to expand in Michigan, Indiana and Ohio. In exchange,
Spartan Stores will be benefited by Nash Finch's leading position
in grocery distribution to military commissaries and exchanges,
its comprehensive wholesale grocery network throughout the
Other Stocks to Consider
Investors may consider other consumer staples stocks, such as
Green Mountain Coffee Roasters Inc
Sanderson Farms Inc.
). Both companies carry a Zacks Rank #1 (Strong Buy).
GREEN MTN COFFE (GMCR): Free Stock Analysis
NASH FINCH CO (NAFC): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
SPARTAN STORES (SPTN): Free Stock Analysis
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