July 22 Spartan Stores Inc, the
ninth-largest grocery distributor in the United States, will
merge with Nash Finch Co in a deal that gives it access
to U.S. military stores at home and abroad.
The companies valued the all-stock deal at $1.3 billion,
including debt at both. Spartan Stores shares rose 20 percent to
$25.50 in premarket trading on Monday, while Nash Finch's shares
were up 27 percent at $32.25.
Shareholders in Nash Finch, which derives about half of its
sales from military-related businesses, will receive 1.20 shares
of Spartan Stores for each share they own.
Spartan was valued at $464 million as of Friday close, while
Nash Finch had a market capitalization of $312 million.
On closing, shareholders of Spartan Stores will own about
57.7 percent of the combined company, while Nash Finch
shareholders will hold about 42.3 percent.
The merger comes within a month of Kroger Co buying
regional grocer Harris Teeter Supermarkets Inc in a
$2.5 billion deal.
Military commissaries sell groceries and household goods to
personnel and retirees at cheaper prices, while exchanges are
retail stores operating on military installations and also
include other services such as barbershops and fast food
Spartan supplies to about 390 independent grocery outlets in
Michigan, Indiana and Ohio, and has 102 owned stores in
The merger is expected to save about $50 million annually by
the third year, and start adding to adjusted earnings within the
first full fiscal year, the companies said.
Amazon.com Inc, in June, had also unveiled a new
version of its successful Prime shipping service to attract more
frequent shoppers with groceries and other everyday household
Moelis & Co gave financial advice to Spartan Stores, while
Nash Finch's financial adviser was J.P. Morgan Securities Inc.
Warner Norcross & Judd LLP was legal counsel for Spartan Stores
and Nash Finch's legal adviser was Morgan, Lewis & Bockius LLP.