Fleming Companies Inc has announced plans for the sale of 31 mostly Minnesota-based Rainbow Foods stores to the Wisconsin-based Roundy's Inc supermarket chain.
The parties have executed an asset purchase agreement and have filed it, along with a motion related to the proposed sale, with the United States Bankruptcy Court. A Lewisville TX-based supermarket supplier, Fleming seeks to establish bidding procedures at its May 19, 2003, hearing before the court and to obtain a sale hearing June 4, 2003. If the court approves the sale to Roundy's, the transaction is expected to close in June 2003.
According to terms of the purchase agreement, the company anticipates net cash proceeds consisting of $42.5 million for non-inventory assets, and about $40 million for inventory. Roundy's is also expected to assume some $35 million of long-term capital leases. The purchase price is subject to adjustments if closing delays occur.
Roundy's also has agreed to hire substantially all current store associates. The purchase agreement is subject to Roundy's obtaining approval of the transaction from its lenders, approval by the bankruptcy court, Hart-Scott-Rodino approval, and closing conditions.
Fleming and its operating subsidiaries filed voluntary petitions April 1, 2003, for reorganization under Chapter 11 of the US Bankruptcy Code.
Roundy's supplies more than 800 supermarkets in 14 states from eight distribution centers. It operates more than 80 stores in Wisconsin as Pick 'n Save and Copps Food Centers.