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International food retailer Delhaize Group has reached an agreement to sell its Sweetbay Supermarket, Harveys and Reid’s banners to Bi-Lo Holdings LLC for $265 million in cash.
Under the agreement, in addition to 72 Sweetbay stores, 72 Harveys stores and 11 Reid’s stores, Bi-Lo Holdings will acquire leases for 10 prior Sweetbay locations, while Delhaize will retain Sweetbay’s distribution center. In 2012, the 165 stores included in the transaction generated revenues of about $1.8 billion. The stores employ about 10,000 associates.
“We believe this transaction represents a significant move towards simplifying our business and will allow for even greater focus at Delhaize America,” said Delhaize Group CEO Pierre-Olivier Beckers. “The transaction will further increase the financial flexibility required to execute our strategic priorities.”
“[T]his transaction … will build on the strength of our Bi-Lo and Winn-Dixie stores and allow us to extend our great products at great value to a broader customer base,” noted Randall Onstead, president and CEO of Jacksonville, Fla.-based Bi-Lo Holdings, parent company of the Bi-Lo and Winn-Dixie chains. “Sweetbay, Harveys and Reid’s are well recognized and trusted businesses that share our passion for exceptional service.”
The deal is expected to close in the fourth quarter of 2013 and is subject to regulatory approval as well as customary closing conditions and working capital adjustments. Until the transaction is complete, Sweetbay, Harveys and Reid’s will continue to operate independently from Bi-Lo Holdings and its subsidiaries.
Lazard acted as financial adviser to Delhaize for the transaction. Credit Suisse, The Food Partners and Alvarez & Marsal Transaction Advisory Group acted as financial advisers to Bi-Lo Holdings, with Gibson, Dunn & Crutcher LLP taking the role of the company's legal adviser.