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SUPERVALU Sells Grocery Chains to Cerberus-Led Group; Wells Fargo Leads $900MM ABL

January 11, 2013, 07:59 AM

SUPERVALU Inc. announced a definitive agreement under which it will sell its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies (collectively, the Banners) to AB Acquisition LLC (AB Acquisition), an affiliate of a Cerberus Capital Management L.P. (Cerberus)-led investor consortium which also includes Kimco Realty Corporation, Klaff Realty LP, Lubert-Adler Partners and Schottenstein Real Estate Group, in a transaction valued at $3.3 billion.

The sale will consist of the acquisition by AB Acquisition of the stock of New Albertsons, Inc. (NAI), a wholly-owned subsidiary of SUPERVALU, which owns the Banners, for $100 million in cash. NAI will be sold to AB Acquisition subject to approximately $3.2 billion in debt, which will be retained by NAI. As part of the transaction, which includes 877 stores across the Banners, AB Acquisition-owned Albertson’s LLC will reunite its Albertson’s stores with the acquired NAI Albertsons stores.

In connection with the Transactions, SUPERVALU has negotiated a new and fully underwritten $900 million asset-based revolving credit facility led by Wells Fargo and a $1.5 billion term loan secured by a portion of the company’s real estate and an equity pledge of Moran Foods, LLC (the parent entity of the Save-A-Lot business) led by Goldman Sachs Bank USA, Credit Suisse, Morgan Stanley, Bank of America Merrill Lynch and Barclays.

The proceeds of these financings will be used to replace the existing $1.65 billion asset-based revolving credit facility, the existing $846 million term loan, and to call and refinance $490 million of 7.5% bonds scheduled to mature in November 2014.

View the entire SUPERVALU release.





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