Supervalu Completes Tender Offer for Total Logistics

MINNEAPOLIS -- Supervalu, Inc. said yesterday that it had completed its cash tender offer for all outstanding shares of common stock of Milwaukee-based Total Logistics, Inc., a national provider of integrated third-party logistics services and manufacturer of refrigeration systems. The tender offer began Jan. 7 and expired at midnight EST on Feb. 4.

The acquisition consolidates Total Logistics' and Supervalu's established third-party logistics businesses, giving rise to an expanded platform and infrastructure from which the Supervalu will serve new and existing customers with end-to-end supply chain solutions.

Supervalu chairman and c.e.o. Jeff Noddle said in a statement: "Total Logistics is a perfect fit with Supervalu's long-term strategic goals for our third-party logistics business. Supervalu's strength, experience, and resources, combined with Total Logistics' solid customer base, comprehensive supply chain services offering, and critical mass, enables us to offer an expanded suite of logistics solutions to current and prospective customers -- not only in the food business, but in other industries as well."

Supervalu's newly combined third-party logistics business encompasses a broad array of services, among them warehouse management, transportation, procurement, contract manufacturing and logistics engineering, and management services. It manages more than 30 facilities around the country. The customer base comprises local, regional, national, and international firms engaged in food and beverage manufacturing, consumer and industrial product manufacturing, wholesale distribution, and retailing. The consolidated business will report to Supervalu e.v.p., president, and c.o.o., distribution Mike Jackson, who has overseen the company's third-party logistics efforts.

The acquisition additionally brings Supervalu the capabilities of Zero Zone, a niche manufacturer of refrigerated and frozen display cases for grocery, convenience, dollar, and drug store chains. Zero Zone also produces refrigeration systems and racks to power and control refrigeration systems, electrical panels, and stand-by power for both retail and industrial applications. The company is a pioneer in such innovations as improved case lighting and energy efficiency. The Zero Zone operation will report to Supervalu e.v.p. Dave Boehnen.

The aggregate transaction value is about $234 million, including assumed debt of approximately $69 million and transaction expenses, the company said, adding that it expects the acquisition to be slightly accretive to fiscal year 2006.

Supervalu holds leading market share positions across the United States, with its more than 1,500 retail grocery locations, including licensed Save-A-Lot locations.
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