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    Nash Finch to Buy Two Roundy's DCs

    MINNEAPOLIS -- Nash Finch Co. has inked an agreement with Roundy's, Inc. to acquire the net assets, including customer contracts, of the latter company's wholesale food distribution divisions in Westville, Indiana, and Lima, Ohio, and two retail stores in Ironton and Van Wert, Ohio, for approximately $225 million.

    MINNEAPOLIS -- Nash Finch Co. has inked an agreement with Roundy's, Inc. to acquire the net assets, including customer contracts, of the latter company's wholesale food distribution divisions in Westville, Indiana, and Lima, Ohio, and two retail stores in Ironton and Van Wert, Ohio, for approximately $225 million.

    The Westville and Lima divisions to be acquired represent approximately $1 billion in annual sales. Nash Finch says the distribution centers, servicing more than 500 customers principally in Indiana, Illinois, Ohio and Michigan, fit well with its existing network. It does not anticipate having to close any facilities as a result. Moreover, the strategically located distribution centers will allow Nash Finch to expand merchandising programs in a variety of areas, including the distribution of produce and meat, general merchandise, and health and beauty care.

    "We have long admired the outstanding customers and dedicated associates of these divisions and are excited for them to join our organization," said Ron Marshall, Nash Finch's c.e.o., of the acquisition. "Those customers have our commitment that they will experience the same levels of outstanding customer service that all Nash Finch customers enjoy today. Customers of both Nash Finch and these divisions will benefit from our ability to buy product much more efficiently as a combined organization, improving their ability to win in an increasingly competitive market. Most importantly, however, this acquisition continues to underscore our strategic commitment to the independent grocery retailing community."

    Anticipating productivity improvements and buying efficiencies over several years -- particularly as it relates to transportation, enhanced warehouse capacity utilization, and the reduction of outside storage space -- Nash Finch said the acquisition would be immediately accretive to earnings. Depending on the timing and nature of its integration process, the company said it believes that as a result of the acquisition, operating earnings will improve by approximately $31 to $33 million, net of implementation costs of approximately $3 million, during the twelve months following closing of the transaction.

    The closing of the transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and financing. The company intends to finance the acquisition with borrowings under its existing bank facility and a debt or convertible debt financing.

    In other news, the Minneapolis-based food retailer and distributor declared a regular quarterly cash dividend of 13.5 cents per share of common stock. The dividend is payable March 18, 2005 to shareholders of record at the close of business on March 4, 2005. It is the company's 314th consecutive quarterly cash dividend. There are 12,676,395 shares of common stock outstanding.

    Nash Finch's food distribution business serves independent retailers and military commissaries in 27 states, the District of Columbia, Europe, Cuba, Puerto Rico, Iceland, the Azores and Honduras. The company also owns and operates retail stores primarily in the Upper Midwest.

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