United Natural Foods Inc (Nasdaq: UNFI) has entered into a definitive agreement to acquire all of the stock of Tony’s Fine Foods, a distributor of perishable food products including specialty protein, cheese, deli, foodservice, and bakery goods throughout the western United States, as well as Alaska and Hawaii.
Founded in 1934 by the Ingoglia family, Tony’s products are sold primarily to retail and specialty grocers, foodservice customers, and other distribution companies.
For its fiscal year ended September 30, 2013, Tony’s generated approximately $714 million in net sales. Consummation of the transaction is subject to satisfaction of customary closing conditions, including compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as amended. The transaction is expected to close late in the fourth quarter of fiscal 2014. Upon closing, Tony’s will be operated as a wholly owned subsidiary of UNFI, and the transaction is expected to be accretive to the company’s earnings in its fiscal year 2015.
Total purchase price for the business and related real estate is expected to be about $195.3 million, subject to certain post-closing adjustments, and will consist of around $187.8 million in cash and approximately 112,000 shares of UNFI’s common stock. Shareholders of Tony’s will use a portion of the proceeds to pay off all of Tony’s’ indebtedness as of the closing. UNFI expects to finance the cash portion of the purchase price with a combination of available cash and borrowings under its revolving credit facility. A portion of borrowings under the revolving credit facility are expected to be refinanced into an approximately $150 million real-estate backed term loan facility that the company anticipates it will enter into in the fourth quarter of fiscal 2014 or first quarter of fiscal 2015.
UNFI. carries and distributes more than 65,000 products to more than 31,000 customer locations throughout the United States and Canada. The company serves a variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators, and the foodservice channel. Access www.unfi.com to learn more.
For more about Tony’s, go to http://tonysfinefoods.com.