Acquisition to Expand High-Growth Ethnic and Gourmet Product
Offerings and Distribution Capacity
Expected to be Accretive to Fiscal 2017 Earnings
PROVIDENCE, R.I.--(BUSINESS WIRE)--Feb. 29, 2016--
United Natural Foods, Inc. (Nasdaq: UNFI) (the "Company") today
announced that it has entered into a definitive agreement to acquire all
outstanding stock of Haddon House Food Products, Inc. (“Haddon”) and
certain affiliated entities as well as certain real estate, in a cash
transaction for approximately $217.5 million, subject to certain
customary post-closing adjustments. Founded in 1960 by the Anderson
family, Haddon is a well-respected distributor and merchandiser of
natural and organic and gourmet ethnic products throughout the Eastern
United States. Haddon has a diverse, multi-channel customer base
including conventional supermarkets, gourmet food stores and
independently owned product retailers.
“Haddon House has a unique product and service offering that we expect
to play an important role in our ongoing strategy to build out UNFI's
gourmet and ethnic product categories across the country,” stated Steven
Spinner, UNFI’s President and Chief Executive Officer. “The Haddon House
team has demonstrated exemplary customer service and growth over the
last decade while also building a distinctive private label brands
business. We are excited to have them join the UNFI family as we venture
into new channels and markets together. I look forward to working with
David Anderson, Sr. and David Anderson, Jr., both of whom will remain at
the company in leadership roles, as we move this exciting service
offering and product category across our companies and throughout the
US."
“This transaction will provide us with greater operating scale and
resources to further develop our product and service offering as we work
with the UNFI team to broaden our geographic reach and route to market
across complementary and new customer bases. We are excited about the
opportunities this combination will create for consumers, employees,
suppliers, and our stockholders,” stated David Anderson, Sr., President,
Haddon House Food Products, Inc.
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 is
expected to close at the start of the fourth quarter of fiscal 2016.
Upon closing, Haddon will be operated as a wholly-owned subsidiary of
the Company. The transaction is expected to be accretive to the
Company’s earnings in fiscal 2017. The Company expects to finance the
purchase price with a combination of available cash and borrowings under
its revolving credit facility.
Conference Call & Webcast
The Company will host a
conference call and audio webcast today, Monday, February 29, 2016 at
8:00 a.m. EST to discuss the proposed acquisition of Haddon House as
well as its preliminary results and updated fiscal 2016 guidance, which
was also announced in a separate release today. 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.
carries and distributes more than 85,000 products to more than 40,000
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 Forbes Magazine in 2014 as one of “America's Best Managed
Companies,” ranked by Fortune in 2012 as one of its “Most Admired
American Companies,” and chosen by Food Logistics Magazine as one of its
2013 Top 20 Green Providers.
For more information on United Natural Foods, Inc., visit the Company’s
website at www.unfi.com.
About Haddon House Food Products
Haddon House Food Products (http://www.haddonhouse.com)
is one of the country's finest distributors, importers and exporters of
specialty, natural, organic, ethnic and kosher foods. For more than 50
years, Haddon House has provided the finest quality dry grocery, frozen
and refrigerated products as well as outstanding service to thousands of
retailers in the United States and abroad. Haddon House Food Products,
Inc. was advised by Wells Fargo Securities, LLC.
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 September 30, 2015,
its quarterly report on Form 10-Q filed with the SEC on December 10,
2015 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 Haddon; the ability of the Company to
consummate the proposed acquisition of Haddon and retain Haddon’s
customers on terms similar to those in place with Haddon; the Company's
ability to successfully deploy its operational initiatives to achieve
synergies from the Haddon acquisition; 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 shift in
the Company's product mix as a result of its acquisition of Tony's Fine
Foods and the resulting lower gross margins on those 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; increased competition in our industry as a result of increased
distribution of natural, organic and specialty products by conventional
grocery distributors and direct distribution of those products by large
retailers; the Company's ability to timely and successfully deploy its
warehouse management system throughout its distribution centers and its
transportation management system across the Company; the addition or
loss of significant customers; volatility in 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; consumer demand for natural and organic products outpacing
suppliers’ ability to produce those products; decreased forward buying
opportunities; union-organizing activities that could cause labor
relations difficulties and increased costs; the ability to identify and
successfully complete acquisitions of other natural, organic and
specialty food and non-food products distributors; management's
allocation of capital and the timing of capital expenditures; and the
Company's ability to successfully deploy its operational initiatives to
achieve synergies from the acquisition of Tony’s Fine Foods and Haddon,
if we consummate our acquisition. 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160229005593/en/
Source: United Natural Foods, Inc.
AT THE COMPANY:
Michael Zechmeister
Chief Financial
Officer
(401) 528-8634
or
ICR
Katie Turner
General
Information
(646) 277-1228