Roundy’s Announces Sale of 18 Rainbow Stores and Full Exit from Minneapolis/St. Paul Market
- May 10, 2014
Roundy’s Inc. recently announced the decision to fully exit the Minneapolis-St. Paul market. The company entered into definitive agreements to sell 18 Rainbow stores in the Minneapolis-St. Paul market to a group of local grocery retailers, including Supervalu Inc.
The aggregate sale price for the properties is approximately $65 million in cash. The proceeds from inventory that will be sold at the closing of the transaction will be added to that sum. As per the agreements, the buyers will assume the lease obligations and certain multi-employer pension liabilities related to the acquired stores. Subject to satisfaction or waiver of closing conditions in the definitive agreements, the transaction for the 18 stores is expected to close during the third quarter. The sale proceeds from the transaction will be used to pay down borrowings under its term loan and asset-based revolving credit facility. Moelis & Co. is acting as Roundy’s exclusive financial advisor for the transaction.
Observed Chairman, President & CEO Robert Mariano: “The economic downturn over the last few years, coupled with an increased competitive footprint in the Minneapolis-St. Paul market, has made it difficult for Roundy’s to keep the Rainbow banner competitive. However, we believe the sale of these Rainbow stores to this group of local operators will provide those stores better stewardship in serving their communities in the Minneapolis-St. Paul market going forward. The transaction will also allow us to better focus strategically on growing our Mariano’s banner in the Chicago market and strengthen our business in our core Wisconsin markets.”
Roundy’s is also currently seeking additional buyers for its remaining nine Rainbow stores and ultimately plans to either sell or close those remaining stores and fully exit the Minneapolis-St. Paul market.
Photo Courtesy of: www.rainbowfoods.com