Spartan Stores has entered into a purchase agreement to acquire 17 retail grocery stores, including 15 pharmacies, from VG’s Food Center and VG’s Pharmacy, a privately held Fenton, Michigan-based retail grocery operator and currently the company’s largest distribution customer.
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Spartan said it expects the transaction to close near the end of its fiscal 2009 third quarter.
Upon completion, the transaction is expected to increase annual retail segment sales by approximately US$310m, with annual consolidated sales increasing approximately $160m, as VG’s is an existing distribution customer.
During the first year of ownership, the ompany expects this acquisition to have a neutral affect on earnings per share as initial realised operational synergies from the transaction will be more than offset by transition expenditures.
The acquisition is expected to be accretive to net earnings during the second year of operation.
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By GlobalDataSpartan Stores’ chairman Craig C. Sturken said: “We are very enthused to bring VG’s, a premier Michigan retail grocery operator, further into the Spartan Stores’ family. Achieving profitable growth through a combination of organic growth and prudent retail acquisitions is the essence of our business strategy. This transaction follows our successful acquisitions of D&W Food Centers and Felpausch Food Centers.
“The VG’s stores serve communities in key Michigan markets where we have no retail presence. The Van Gilder family has been one of our best and most loyal distribution customers for nearly 50 years, and we are very proud of our long-standing relationship with them.”
Lisa Van Gilder, president and CEO of VG’s said: “We are very pleased to be partnering with Spartan Stores. They are recognized among the best retail grocery operators in the industry and have demonstrated their ability to succeed in a very challenging environment. We have great confidence in Spartan Stores and their ability to provide excellent service and value to our customers, and the continuity in our corporate cultures will be beneficial to our associates.”
