Acquisition will Expand High-Growth Perishable Product Offerings and
Distribution Footprint in Western United States
Highly Complementary Transaction Expected to be Accretive to Fiscal
2015 UNFI Earnings
PROVIDENCE, R.I.--(BUSINESS WIRE)--May 22, 2014--
United Natural Foods, Inc. (Nasdaq: UNFI) (the "Company") today
announced that it had entered into a definitive agreement to acquire all
of the stock of Tony’s Fine Foods (“Tony’s”), a leading distributor of
perishable food products including a wide array of specialty protein,
cheese, deli, food service 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, food service 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 the satisfaction of customary closing conditions,
including compliance with the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 as amended, and 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 the Company, and the transaction is
expected to be accretive to the Company’s earnings in its fiscal year
2015.
The total purchase price for the acquisition of the business and related
real estate is expected to be approximately $195.3 million, subject to
certain post-closing adjustments, and will consist of approximately
$187.8 million in cash and approximately 112,000 shares of the Company’s
common stock. The shareholders of Tony’s will utilize a portion of the
proceeds to pay off all of Tony’s’ existing indebtedness as of the
closing. The Company expects to finance the cash portion of the purchase
price with a combination of available cash and borrowings under its
revolving credit facility, which it amended yesterday to, among other
things, increase the aggregate amount of availability by $100 million. A
portion of the 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.
“Natural protein and specialty perishable products are a very important
part of UNFI’s future. Tony’s Fine Foods will serve as our platform for
building out our national perimeter product offering. These fast growing
products will help us further expand market share as we build out our
retail store SKU offering,” commented Steven Spinner, UNFI’s President
and Chief Executive Officer. “We welcome Scott and Karl Berger and look
forward to working with the entire Tony’s Fine Foods team of
professionals as we build upon their more than 80 years of marketing,
logistics and distribution excellence to continually deliver exceptional
customer service and drive future growth.”
Karl Berger, Tony’s Fine Foods Co-President and third generation
operator, commented, “Tony’s has a consistent track record of providing
quality products and innovative logistical solutions to a wide variety
of food industry establishments with a commitment to superior customer
service. We are thrilled to become part of UNFI, one of the leading
natural, organic and specialty distributors in the U.S. and Canada,
while maintaining our West Coast distribution and logistics network. We
believe together, Tony’s and UNFI will deepen our relationships with
existing customers and broaden our reach to new customers across all of
our markets.”
Conference Call & Webcast
The Company will host a conference call and audio webcast today,
Thursday, May 22, 2014 at 9:00 a.m. EDT. The conference call dial-in
number is (877) 407-3982. The audio webcast of the conference call will
be available to the public, on a listen-only basis, via the Internet at
the Investors section of the Company's website at www.unfi.com.
The online archive of the webcast will be available on the Company's
website for 30 days.
About United Natural Foods
United Natural Foods, Inc. (http://www.unfi.com)
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 wide variety of retail formats including conventional
supermarket chains, natural product superstores, independent retail
operators and the food service channel. United Natural Foods, Inc. was
ranked by Fortune in 2006 - 2010 as one of its "Most Admired Companies"
and in 2012 as one of its "Most Admired American Companies," winner of
the Supermarket News 2008 Sustainability Excellence Award, recognized by
the Nutrition Business Journal for its 2009 Environment and
Sustainability Award and chosen by Food Logistics Magazine as one of its
2012 Top 20 Green Providers.
About Tony’s Fine Foods
Since 1934 Tony’s Fine Foods (http://tonysfinefoods.com)
specializes in the marketing, logistics and distribution of deli,
bakery, food service, specialty, and perishable products throughout the
Western United States, including Alaska and Hawaii. Tony’s is committed
to providing quality products, exceptional customer service, and
innovative logistical solutions to a wide variety of food industry
establishments.
For more information on United Natural Foods, Inc., visit the
Company’s website at www.unfi.com.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding the
Company's business that are not historical facts are "forward-looking
statements" that involve risks and uncertainties and are based on
current expectations and management estimates; actual results may differ
materially. The risks and uncertainties which could impact these
statements are described in the Company's filings under the Securities
Exchange Act of 1934, as amended, including its annual report on Form
10-K filed with the Securities and Exchange Commission ("SEC") on
October 1, 2013, its quarterly reports on Form 10-Q filed with the SEC
on December 11, 2013 and March 12, 2014, and other filings the Company
makes with the SEC, and include, but are not limited to the occurrence
of any event, change or other circumstance that could give rise to the
termination of the acquisition agreement entered into by the parties in
connection with the Company’s proposed acquisition of all of the stock
of Tony’s; the ability of the Company to consummate the proposed
acquisition of Tony’s; the Company's ability to successfully deploy its
operational initiatives to achieve synergies from the Tony’s
acquisition; the Company’s ability to arrange and close on a term loan
facility on terms satisfactory to the Company, the Company's dependence
on principal customers; the Company's sensitivity to general economic
conditions, including the current economic environment; changes in
disposable income levels and consumer spending trends; the Company's
ability to reduce its expenses in amounts sufficient to offset its
increased focus on sales to conventional supermarkets and the resulting
lower gross margins on the sales; the Company's reliance on the
continued growth in sales of natural and organic foods and non-food
products in comparison to conventional products; the Company's ability
to timely and successfully deploy its warehouse management system
throughout its distribution centers; increased fuel costs; the Company's
sensitivity to inflationary and deflationary pressures; the relatively
low margins and economic sensitivity of the Company's business; the
potential for disruptions in the Company's supply chain by circumstances
beyond its control; the risk of interruption of supplies due to lack of
long-term contracts, severe weather, work stoppages or otherwise; the
ability to identify and successfully complete acquisitions of other
natural, organic and specialty food and non-food products distributors;
and management's allocation of capital and the timing of capital
expenditures. Any forward-looking statements are made pursuant to the
Private Securities Litigation Reform Act of 1995 and, as such, speak
only as of the date made. The Company is not undertaking to update any
information in the foregoing reports until the effective date of its
future reports required by applicable laws. Any projections of future
results of operations are based on a number of assumptions, many of
which are outside the Company's control and should not be construed in
any manner as a guarantee that such results will in fact occur. These
projections are subject to change and could differ materially from final
reported results. The Company may from time to time update these
publicly announced projections, but it is not obligated to do so.
Source: United Natural Foods, Inc.
United Natural Foods, Inc.
Mark Shamber
Chief Financial
Officer
401-528-8634
or
ICR
Katie Turner
General
Information
646-277-1228