United Natural Foods To Buy Tony's Fine Foods For $195.3 Mln

(RTTNews) - Specialty foods distributor United Natural Foods, Inc. (UNFI) said Thursday that it has agreed to acquire Tony's Fine Foods, a distributor of perishable food products, for about $195.3 million in cash and stock. The company noted that the acquisition will expand its presence in high-growth perishable product offerings as well as boost its distribution footprint in Western U.S.

Founded in 1934 by the Ingoglia family, Tony's products are sold primarily to retail and specialty grocers, food service customers and other distribution companies. The company distributes a wide array of specialty protein, cheese, deli, food service and bakery goods throughout the Western U.S., as well as Alaska and Hawaii. For its fiscal year ended September 30, 2013, Tony's generated about $714 million in net sales.

United Natural Foods expects the transaction to close late in the fourth quarter of fiscal 2014 and be accretive to its earnings in fiscal 2015. Upon closing, Tony's will be operated as a wholly-owned subsidiary of United Natural Foods.

Steven Spinner, UNFI's President and Chief Executive Officer said, "Tony's Fine Foods will serve as our platform for building out our national perimeter product offering. These fast growing products will help us further expand market share as we build out our retail store SKU offering."

United Natural Foods noted that the purchase price will consist of about $187.8 million in cash and approximately 112,000 shares of its common stock. The shareholders of Tony's will utilize a portion of the proceeds to pay off all of that company's existing debt at closing.

United Natural Foods expects to finance the cash portion of the purchase price with a combination of available cash and borrowings under its revolving credit facility. The company amended its revolving credit facility on Wednesday that will increase the aggregate amount of availability by $100 million.

The company expects to refinance a portion of the borrowings under its revolving credit facility into an approximately $150 million real-estate backed term loan facility that the company anticipates it will enter into in the fourth quarter of fiscal 2014 or first quarter of fiscal 2015.

UNFI is currently trading at $67.50, up $0.78 or 1.17 percent on a volume of 109,240 shares.