Schulte Roth, Wachtell, Cleary Advise on $3.3 Billion Sale of Grocery Store Chains
Grocery store chain operator Supervalu Inc. will sell five of its chains to a Cerberus Capital Management-led investor consortium in a deal valued at $3.3 billion, primarily in debt.
The investor group includes Kimco Realty Corporation, Klaff Realty, Lubert-Adler Partners and Schottenstein Real Estate Group. As part of the deal, it will acquire Supervalu's Albertsons, Acme, Jewel-Osco, Shaw's and Star Market supermarket chains and their associated in-store pharmacies.
Supervalu, which is based in Eden Prairie, Minn., is one of the nation's largest grocery chain operators with about 4,350 stores that bring in annual sales of $35 billion.
The Cerberus-led consortium will pay $100 million in cash and assume $3.2 billion in debt to acquire the chains, which include 877 individual stores. The group also agreed to buy up to 30 percent of Supervalu's outstanding stock at $4 per share.
Facing mounting long-term debt and capital obligations, Supervalu began shopping itself and closing under-performing stores last year.
"The transactions announced…represent the successful culmination of the in-depth strategic review process we commenced this past summer," now-former CEO and chairman Wayne Sales said in a statement.
The deal, which is pending closing conditions, is expected to close in the first quarter of 2013.
Cerberus turned to longtime outside counsel Schulte Roth & Zabel. Working on the deal from New York were partners Stuart Freedman, Robert Loper and John Pollack, special counsel Kimberly Monroe and associates Elliott Tapp, Matthew Gruenberg, Kristen Poole, Daniel Belostock, Pavel Shaitanoff and Lane Verlanden, M&A; partners Alan Waldenberg and Kurt Rosell, and associate Misti Bridges, tax; partner Michael Littenberg and special counsel James Nicoll, securities and capital markets; partner Ronald Risdon, special counsel Lynn Tanner and associate Jae Kim, finance; partners Ronald Richman and Laurence Moss, and special counsel Scott Gold, employee benefits; partner Robert Kiesel, special counsel Scott Kareff and associates Watt Wanapha and Melissa Karp, intellectual property; partner Howard Epstein and associate Valerie Sheaffer, environmental and insurance; partners Michael Swartz and Peter Halasz, and associate Beverly Ang, antitrust; and partners Jeffrey Lenobel, Marshall Brozost and Julian Wise, and associate Joshua Cohen, real estate.
Supervalu tapped a Wachtell, Lipton, Rosen & Katz team led by corporate partners David Silk and Igor Kirman, along with partner DongJu Song, corporate; partner Michael Segal and associate Adam Kaminsky, executive compensation and benefits; and partner Deborah Paul, tax.
Goldman Sachs, financial advisor to Supervalu in the deal, was advised by Cleary Gottlieb Steen & Hamilton partner Ethan Klingsberg, M&A, and associate Kyle Harris, corporate. Both are in New York.
Freshfields, Shearman, Cravath Consult on $1.7B Packaging Transaction
Glass and metal packaging company Ardagh Group has entered into "exclusive negotiations" to buy glass bottles and jars maker Verallia North America, the U.S. arm of France's Compagnie de Saint-Gobain, for $1.7 billion.
The deal would allow the Luxembourg-based Ardagh Group to expand its U.S. operations and grow its global glass business by 60 percent, the firm's chairman Paul Coulson said in a statement.