A planned purchase of Associated Grocers of Florida for $180 million has been made by Supervalu.
AGF of Pompano Beach, serves independent retailers in South Florida, the Caribbean, Central and South America and Asia, according to a news release. The company generated $650 million in revenue in its fiscal year ending last July.
Associated Grocers will be a wholly-owned subsidiary of Supervalu when the deal is complete.
“Associated Grocers represents a great opportunity for us to further expand our wholesale business into another important region,” Mark Gross, president and CEO of Supervalu, said in the release.
The transaction has been approved by the board of directors of each company and is expected to close by the end of 2017.
Supervalu generated $3.8 billion in net sales in the second quarter, up 35 percent from last year, according to a news release. The increase in sales came mostly on the wholesale side of the business, which saw a major increase in the wake of Supervalu’s acquisition of Unified Grocers, a move the company made last summer.
Supervalu reported a net loss from continuing operations of $25 million, partly due to costs of integrating Unified Grocers.
Gross profit was $428 million, or 11.3 percent of net sales, down from 14.1 percent last year. The company stated the decrease is mostly due to Supervalu shifting its business segment mix toward wholesale.
On the retail side, same-store sales were down 3.5 percent. Second-quarter retail sales were $1.02 billion, down 1.1 percent from last year.
“We continue to make tremendous strides in driving our strategy, evidenced by another quarter of strong growth from our core wholesale business which now represents over 70 percent of net sales,” Gross said. “Additionally, our results now include the benefit of Unified Grocers, where I’m pleased the transition is going well. We have a lot to be excited about as we turn our focus toward the back half of our fiscal year.”