Spartan Stores to Buy VG's Food and Pharmacy
In a deal that will expand its retail presence in key Michigan markets, Spartan Stores, Inc. said it will acquire 17 retail grocery stores, including 15 pharmacies, from VG's Food Center, Inc. and VG's Pharmacy, Inc.
On the heels of its recent successful acquisitions of D&W Food Centers and Felpausch Food Centers, the deal with the privately held Fenton, Michigan-based VG's -- currently Spartan's largest distribution customer -- will expand Spartan's supermarket store base 20 percent to 101 stores.
Upon completion of the deal, the Grand Rapids, Mich.-based retailer/distributor expects to boost its annual retail segment sales by about $310 million, with annual consolidated sales increasing about $160 million.
"Achieving profitable growth through a combination of organic growth and prudent retail acquisitions is the essence of our business strategy," said Craig C. Sturken, Spartan Stores' chairman. "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."
Noting that Spartan Stores is "recognized among the best retail grocery operators in the industry" with a demonstrated ability "to succeed in a very challenging environment," Lisa Van Gilder, president/c.e.o of VG's said her company has "great confidence in Spartan Stores, and their ability to provide excellent service and value to our customers." Van Guilder also noted the favorable "continuity in corporate cultures" that "will be beneficial to our associates."
During the first year of ownership, Spartan said it expects VG's acquisition to have a neutral affect on its earnings per share because any initial realized operational synergies will be more than offset by transitional merchandising, product and branding initiatives, as well as initial employee training and other costs associated with integrating the acquired operations.
Completion of the transaction, which is subject to customary closing activities and satisfactory due diligence, is expected to close at the end of fiscal 2009 third quarter.
The Food Partners, a national investment banking firm providing merger, acquisition and divestiture services to the supermarket industry, advised Spartan Stores on the VG's acquisition.
Shares of Spartan were up about 9 percent at $25.61 in afternoon trade on NASDAQ; the company will announce its fiscal 2009 second-quarter financial results following the close of the stock market on Wednesday.
On the heels of its recent successful acquisitions of D&W Food Centers and Felpausch Food Centers, the deal with the privately held Fenton, Michigan-based VG's -- currently Spartan's largest distribution customer -- will expand Spartan's supermarket store base 20 percent to 101 stores.
Upon completion of the deal, the Grand Rapids, Mich.-based retailer/distributor expects to boost its annual retail segment sales by about $310 million, with annual consolidated sales increasing about $160 million.
"Achieving profitable growth through a combination of organic growth and prudent retail acquisitions is the essence of our business strategy," said Craig C. Sturken, Spartan Stores' chairman. "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."
Noting that Spartan Stores is "recognized among the best retail grocery operators in the industry" with a demonstrated ability "to succeed in a very challenging environment," Lisa Van Gilder, president/c.e.o of VG's said her company has "great confidence in Spartan Stores, and their ability to provide excellent service and value to our customers." Van Guilder also noted the favorable "continuity in corporate cultures" that "will be beneficial to our associates."
During the first year of ownership, Spartan said it expects VG's acquisition to have a neutral affect on its earnings per share because any initial realized operational synergies will be more than offset by transitional merchandising, product and branding initiatives, as well as initial employee training and other costs associated with integrating the acquired operations.
Completion of the transaction, which is subject to customary closing activities and satisfactory due diligence, is expected to close at the end of fiscal 2009 third quarter.
The Food Partners, a national investment banking firm providing merger, acquisition and divestiture services to the supermarket industry, advised Spartan Stores on the VG's acquisition.
Shares of Spartan were up about 9 percent at $25.61 in afternoon trade on NASDAQ; the company will announce its fiscal 2009 second-quarter financial results following the close of the stock market on Wednesday.