As PE backed grocery store M&A has heated up over the past few years, a consortium led by private equity firm Cerberus Capital Management LP has closed on a deal for some of Supervalu Inc.’s (NYSE: SVU) supermarket brands.
The group bought 877 Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores, as well as related in-store pharmacies.
Cerberus, Kimco Realty Corp. (NYSE: KIM), Klaff Realty LP, Lubert-Adler Partners and Schottenstein Real Estate Group paid $100 million in cash and assumed $3.2 billion in debt for the deal. The consortium did the transaction as AB Acquisition LLC. It was announced in January.
Supervalu, headquartered in Eden Prairie, Minn., also owns the Cub, Farm Fresh, Hornbacher’s, Lucky, Save-A-Lot, Shop ‘N Save and Shoppers grocery chains.
Cerberus in a New York based private equity firm with more than $20 billion in capital under management.
In connection with the deal, Supervalu has negotiated a new $900 million asset-based revolving credit facility, led by Wells Fargo, and a $1.5 billion term loan, secured by a portion of the company’s real estate and an equity pledge by Moran Foods LLC. Moran Foods is the parent of Save-A-Lot. The financing will be used to replace Supervalu’s existing $1.65 billion asset-based revolving credit facility, $846 million term loan and to refinance $490 million in bonds scheduled to mature in Nov. 2014.
For more on Supermarket M&A see "Grocers Grow."