Supervalu announces sale of Save-A-Lot Business for $1.365B
Supervalu announced that it has entered into a definitive agreement whereby an affiliate of Onex Corporation will acquire Supervalu's Save-A-Lot business for $1.365B in cash, subject to customary closing adjustments. In connection with the sale, Supervalu and Save-A-Lot will enter into a five-year professional services agreement. The sale of Save-A-Lot is expected to be completed by January 31, 2017, subject to regulatory approvals and other customary closing conditions. Under the terms of the professional services agreement, Supervalu will provide Save-A-Lot with certain services and support functions for its day-to-day operations, including cloud services, merchandising technology, payroll, finance, and other technology and hosting services. Supervalu expects to use the net proceeds from the sale to prepay at least $750M against its outstanding term loan balance. The company intends to use the remaining net sale proceeds to further reduce debt and improve its capital structure, as well as to fund corporate and growth initiatives.