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Subsequent Events Subsequent Events
6 Months Ended
Sep. 09, 2017
Subsequent Events [Abstract]  
Subsequent Events
SUBSEQUENT EVENTS
On September 14, 2017, Supervalu paid $61 to acquire the land and building for a distribution center located in Joliet, Illinois.
On October 17, 2017, Supervalu entered into a letter agreement with each of Albertson’s LLC and NAI pursuant to which the parties agreed that the TSA would expire on September 21, 2018 as to those services that Supervalu is providing to Albertson’s LLC and NAI. Supervalu will continue to provide transition and wind down services as previously agreed. In addition, Supervalu will provide services to Albertson’s LLC for one distribution center until at least October 2018, and NAI may notify Supervalu that it requires services for certain stores beyond September 21, 2018. The fees for these extended services, if any, will be the same per-store weekly fee (subject to a minimum fee) and the same weekly fee for the distribution center that Albertson’s LLC and NAI pay to Supervalu currently. The parties do not expect any of these services, or any of the transition and wind down services, to extend beyond April 2019. Supervalu also agreed that Albertson’s would no longer provide services to Supervalu after September 21, 2019.
On October 17, 2017, Supervalu, a newly formed wholly owned subsidiary of Supervalu (“AG Merger Sub”), and Associated Grocers of Florida, Inc. (“AG Florida”) entered into an Agreement and Plan of Merger (the “AG Merger Agreement”) pursuant to which Supervalu agreed to acquire AG Florida in a transaction valued at approximately $180. Founded in 1945, AG Florida is a retailer-owned cooperative that distributes full lines of grocery and general merchandise to independent retailers, primarily in South Florida, the Caribbean, Central and South America and Asia and had annual sales of approximately $650 in its last fiscal year, which ended on July 29, 2017, estimated by Supervalu under its accounting policies. Supervalu expects to use cash on hand and available liquidity under its Revolving ABL Credit Facility to fund the acquisition.
On the terms and subject to the conditions set forth in the AG Merger Agreement, at the closing of the transactions contemplated thereby (the “AG Closing”), AG Merger Sub will merge with and into AG Florida (the “AG Merger”) with AG Florida surviving the AG Merger as a wholly owned subsidiary of Supervalu, and the shares of AG Florida will be converted into the right to receive cash consideration from Supervalu at the AG Closing.
As further provided in the AG Merger Agreement, the consummation of the transactions contemplated by the AG Merger Agreement is subject to certain closing conditions, including (i) approval of the AG Merger by the shareholders of AG Florida, (ii) any applicable waiting periods (or extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 having expired or been terminated, (iii) the absence of any action or order by any governmental entity that restrains, conditions, challenges the legality or validity of, or otherwise prohibits the AG Merger, (iv) the accuracy of the representations and warranties of the parties (generally subject to a material adverse effect standard), (v) material compliance by the parties with their respective obligations under the AG Merger Agreement, (vi) no material adverse effect having occurred with respect to the AG Florida business after entry into the AG Merger Agreement and no Supervalu bankruptcy, and (vii) other customary closing conditions. The transaction is currently expected to be completed by the end of calendar year 2017.
Under the terms of the AG Merger Agreement, Supervalu will be entitled to receive a termination fee of $7, plus reimbursement of up to $500 thousand in costs and expenses, in the event that the AG Merger Agreement is terminated under certain circumstances, including as a result of a change in the recommendation of the board of directors of AG Florida. In addition, a reverse termination fee of $9 may be payable by Supervalu to AG Florida upon termination of the AG Merger Agreement under certain circumstances, including if Supervalu is unable to obtain antitrust approval before June 14, 2018.