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SuperValu, the largest publicly-held food wholesaler in the U.S., has beefed up its third-party logistics capabilities with the acquisition of Total Logistics for $234 million. The acquisition consolidates Total Logistics' and SuperValu's established third-party logistics businesses, creating an expanded platform and infrastructure from which the company will serve new and existing customers with end-to-end supply chain solutions. The merged operations will manage more than 30 distribution centers and warehouses across the country. Total Logistics' nine-month revenues for 2004 were $253 million. SuperValu had fiscal 2004 sales of $20.2 billion: 52% from retail operations and 48% through its logistics and distribution businesses.
SuperValu's newly combined third-party logistics business offers services including warehouse management, transportation, procurement, contract manufacturing and logistics engineering and management services; it manages more than 30 facilities around the country. The customer base consists of local, regional, national, and international firms engaged in food and beverage manufacturing, consumer and industrial product manufacturing, wholesale distribution and retailing.
The acquisition also brings SuperValu the capabilities of Zero Zone, a successful niche manufacturer of refrigerated and frozen display cases serving the grocery, convenience, dollar and drug store chains. In addition, the company produces refrigeration systems and racks to power and control the refrigeration systems, electrical panels and stand-by power for both retail and industrial applications. Zero Zone is known as a pioneer for innovations like improved case lighting and energy efficiency. The Zero Zone operation will report to Dave Boehnen, SuperValu executive vice president.
SuperValu completed the cash tender offer for all outstanding shares of common stock of Total Logistics, Inc., a national provider of integrated third-party logistics services and manufacturer of premier refrigeration systems.
A total of approximately 5,449,500 shares of Total Logistics common stock were validly tendered and not withdrawn prior to the expiration of the offer, representing approximately 98.5 percent of the outstanding shares of Total Logistics. SuperValu has accepted these shares and payment will be made promptly.
SuperValu completed the acquisition of Total Logistics through a short-form merger in which shares of common stock not purchased in the tender offer will be converted into the right to receive $28.50 per share in cash, without interest. A letter of transmittal to be used for surrendering certificates in exchange for the cash will be sent to holders who did not tender their shares in the offer. The aggregate transaction value is approximately $234 million, including assumed debt of approximately $69 million and transaction expenses. SuperValu expects the acquisition to be slightly accretive to fiscal year 2006.
"Total Logistics is a perfect fit with SuperValu's long-term strategic goals for our third-party logistics business," said Jeff Noddle, chairman and CEO of SuperValu. "SuperValu's strength, experience and resources, combined with Total Logistics' solid customer base, comprehensive supply chain services offering and critical mass, enables us to offer an expanded suite of logistics solutions to current and prospective customers — not only in the food business but in other industries as well."
For the nine months ended Sept. 30, 2004, Total Logistics, Inc. reported revenues of $253.3 million, up 25 percent. Total Logistics, Inc. is a Milwaukee-based holding company; its two wholly owned subsidiaries, Total Logistic Control (TLC) and Zero Zone, employ a total of approximately 3,000 people.
SuperValu Inc., a Fortune 100 company, is one of the largest U.S. companies with operations in grocery retail and supply