C&S Wholesale Grocers Set to Acquire SpartanNash

C&S Wholesale Grocers LLC and SpartanNash have entered into a definitive merger agreement under which C&S will acquire SpartanNash for a purchase price of $26.90 per share of SpartanNash common stock in cash, representing total consideration of $1.77 billion, including assumed net debt.

The transaction price represents a 52.5% premium over SpartanNash’s closing price on June 20, of $17.64, and a premium of 42% to its 30-day volume-weighted average stock price as of June 20, according to a news release.

The transaction has been unanimously approved by the boards of directors of both companies.

SpartanNash’s previously announced quarterly cash dividend of 22 cents per common share will continue to be paid on June 30, to shareholders of record as of the close of business on June 13, the release said.

”This is an exciting opportunity for our team members, partners and, notably, our customers. C&S and SpartanNash share many of the same values, including a strong emphasis on customers, teamwork and our communities. Together, we are uniting some of the most advanced capabilities and boldest innovations in the distribution market to better serve communities across the nation,” said C&S CEO Eric Winn.

“At C&S, we have a legacy of braggingly happy customers, and our team members strive every day to take care of our customers’ stores as if they are our own,” Winn added. “The combination of our two companies’ capabilities puts our collective customers’ stores and our own retail stores at the center of the plate, supporting their ability to thrive in a highly dynamic and competitive environment. Our customers need us more than ever, and we are building a sustainable platform for our team members to be able to support them long into the future.”

“We are energized by the opportunities this combination provides for our associates and customers,” said SpartanNash President and CEO Tony Sarsam. “With our organizational values in close alignment, there will be exciting new career opportunities for our people and a continued commitment to a ‘people first’ culture. For our customers, this transaction creates the necessary scale, efficiency and purchasing power needed to enable independent retailers to compete more effectively with larger big-box chains. Neighborhood grocers are essential pillars of our communities that we want to preserve and strengthen. A thriving hometown grocery store supports local farmers, bolsters the local economy and enhances the overall health and well-being of the community.”

Strategic rationale includes, according to the release:

• Complementary food distribution networks to better support independent retailers — Together, the combined company will operate almost 60 complementary distribution centers covering the U.S. and will serve close to 10,000 independent retail locations, with collectively more than 200 corporate-run grocery stores.
• Greater efficiency and scale expected to result in lower prices for grocery shoppers — Being able to operate at a larger scale, supported by the combined innovative capabilities of the two companies, enables a more efficient supply chain as well as an ability to secure the best possible delivered cost of goods and promotional discounts, which are expected to translate to better pricing for community retailers and at the shelf for consumers. Profit margins in the grocery industry are very low — averaging only 1.6% — and customers and consumers deserve the best value for food and household goods. The stability of the combined organization will allow the combined company and its customers to better compete against various extremely large global grocers in the U.S. food-at-home space, a more than $1 trillion annual industry.
• Preserves accessible, affordable nutrition and pharmacy services in local communities — Nearly half of all U.S. counties have at least one pharmacy desert (a 10-mile radius with no retail pharmacy), and an estimated 5.6% of the country’s population lives in a food desert. Providing families with access to fresh food, essential prescription medications and health services is at the core of the combined company’s operations, distributing to community retailers and operating corporate grocery stores and pharmacies.

The transaction is expected to close in late 2025, subject to certain customary closing conditions, including, among other things, SpartanNash shareholder approval and applicable regulatory approvals, according to the release. C&S has obtained financing commitment letters for the transaction. Wells Fargo has provided a debt financing commitment for the transaction.

Solomon Partners is serving as the exclusive financial adviser to C&S. Gibson, Dunn & Crutcher LLP is serving as legal adviser to C&S and Sullivan & Cromwell LLP is serving as legal adviser to C&S in connection with its debt financing, the release said, adding that BofA Securities Inc. is serving as exclusive financial adviser to SpartanNash. Cleary Gottlieb Steen & Hamilton LLP is serving as legal adviser to SpartanNash.