SpartanNash_Corporate Headquarters_Grand Rapids MI_8-2014_5
SpartanNash headquarters in Byron Township
(SpartanNash courtesy photo)
BYRON TOWNSHIP, MI – SpartanNash is to acquire Caito Foods Service and a portion of Blue Ribbon Transport, the Michigan-based grocer announced on Friday, November 4th.
Under the deal, the Michigan-based grocer is spending $ 217.5 million in cash to acquire Caito’s product distribution business, freshly cut fruit and vegetable business, newly built Fresh Kitchen facility, and logistics business from BRT.
Under the agreement, SpartanNash will reimburse Caito for some transaction costs and pay an additional $ 12.4 million if the company hits performance targets.
“We are excited about this opportunity to expand our presence serving some of the fastest growing categories in the grocery industry, including fresh produce, value-added fruits and vegetables and protein-rich ready meals,” said Dennis Eidson, chief executive officer of SpartanNash. in a statement announcing the purchase.
The acquisition will expand SpartanNash’s customer base by expanding the rapidly growing categories for freshly made mid-platters and side dishes, the company said.
Founded in Indianapolis in 1965, Caito Foods Service is the largest supplier of fresh fruits and vegetables to grocery retailers and food service distributors in 22 states in the Southeast, Midwest and East of the country.
Caito and BRT have combined annual sales of more than $ 600 million. Caito supplies facilities in Indiana, Ohio, and Florida.
The supplier operates a plant for freshly cut fruit and vegetables in Indianapolis and is building a new plant for fresh kitchens with an area of 118,000 square meters in the same city in Indiana.
The $ 32 million Fresh Kitchen will process, cook, and package fresh protein-based foods and complete meals when it opens in early 2017.
Caito provides temperature-controlled sales and logistics services across North America through its subsidiary Blue Ribbon Transport.
The two companies will become part of SpartanNash’s food distribution business upon completion of the transaction. Caito’s senior leadership team, including Caito President Robert Kirch and Blue Ribbon Transport President David Frizzell, will join SpartanNash upon completion of the deal.
Kirch reports to Dave Staples, SpartanNash’s newly appointed company president, and Frizzell to Derek Jones, SpartanNash’s president of wholesale and distribution.
Both will continue in their functions and oversee the acquired activities, which will remain based in Indianapolis.
SpartanNash expects to complete the acquisition by early January. The transaction is subject to regulatory approval and customary closing conditions, the company said. Deutsche Bank acted as financial advisor and Morgan Lewis acted as legal advisor to SpartanNash.
The Fortune 400 publicly traded company distributes groceries to U.S. military commissioners and exchanges, as well as independent grocery stores across the country. SpartanNash also operates 160 supermarkets, mainly under the brand names Family Fare Supermarkets, Family Fresh Markets, D&W Fresh Markets and Sun Mart.