A discount grocery chain with nine locations in Maine is being sold to a Canadian private equity firm for $1.36 billion.
Supervalu, the Minneapolis parent company of the Save-A-Lot chain of small supermarkets, announced the agreement to sell the chain to Onex Corp. of Toronto on Monday. The deal is still subject to customary closing conditions.
In connection with the sale, Supervalu will enter into a five-year professional services agreement to provide management of day-to-day operations for Save-A-Lot, including cloud services, merchandising technology, payroll, finance and other services, according to a news release announcing the sale.
Supervalu, which is one of the largest grocery chains in the U.S. with more than 3,300 stores, intends to use the money from the sale to pay down $750 million in debt and to grow its other divisions.
“(The sale) provides us with a stronger balance sheet that will allow us to further build on our core strengths and growth opportunities,” said Supervalu President and CEO Mark Gross. “It has been a pleasure to work with the Save-A-Lot team, and, once this transaction is completed, I look forward to continuing to work with them as one of our largest professional services customers.”
According to Supervalu’s website, there are Save-A-Lot stores in Portland, Lewiston, Waterville, Presque Isle, South Paris, Farmington, Millinocket, Brewer and Dover-Foxcroft.
The stores are typically 15,000 to 20,000 square feet – about one-third to one-half the size of a typical supermarket such as Hannaford or Shaw’s. Save-A-Lot operates more than 1,300 stores in urban, suburban and rural areas and reaches more than 5 million shoppers each week, according to its website.
The company, which offers discounted food, meat and produce, saw a slight decrease of 1.4 percent in its annual same-store sales in February 2016 compared with a year earlier. In February of 2015, it had reported a 5.8 percent annual increase in same-store sales over 2014.
The deal is expected to close in early 2017 pending regulatory approval and other conditions.
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