Supervalu To Sell Save-A-Lot Business To Onex For $1.365 Bln - Quick Facts

(RTTNews) - Supervalu Inc.(SVU) announced Monday that it has entered into a definitive agreement to sell Save-A-Lot business to an affiliate of Onex Corp. (OCX.TO) for $1.365 billion in cash, subject to customary closing adjustments.

The sale of Save-A-Lot is expected to be completed by January 31, 2017, subject to regulatory approvals and other customary closing conditions.

In connection with the sale, SUPERVALU and Save-A-Lot will enter into a five-year professional services agreement.

Under the terms of the professional services agreement, SUPERVALU will provide Save-A-Lot with certain services and support functions for its day-to-day operations. This includes cloud services, merchandising technology, payroll, finance, and other technology and hosting services.

SUPERVALU said it expects to use the net proceeds from the sale to prepay at least $750 million against its outstanding term loan balance.

The company intends to use the remaining net sale proceeds to further reduce debt and improve its capital structure, as well as to fund corporate and growth initiatives.

SUPERVALU Non-Executive Chairman of the Board, Jerry Storch said, "SUPERVALU is successfully executing on its long term strategic vision and positioning the Company for continued growth and value creation."

In the deal, Barclays Capital Inc. and Greenhill & Co., LLC acted as financial advisors to SUPERVALU.