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GRAND RAPIDS, Mich. -- Spartan Stores Inc. yesterday reached a $42-million deal to sell two of its two of its major supply centers to H.T. Hackney Co., a move toward exiting the convenience store distribution market.
The deal includes Spartan's L&L/Jiroch Company and J.F. Walker Co. subsidiaries, but not United Wholesale Grocery Co., a 12-location cash and carry convenience store distribution operation. Spartan, based in Grand Rapids, Michigan, said it expects the deal to close in 45 days.
"We will be a smaller and more financially sound company as a result of this transaction," said Spartan spokeswoman Jeanne Norcross. "We will be able to put our resources into businesses that have a greater return potential for us."
The grocery retailer/distributor serves 330 independent grocers and operates 80 retail stores throughout Michigan. Now Spartan plans to shift its attention to grocery distribution and grocery retailing.
H.T Hackney is expected to pay Spartan Stores approximately $42 million in cash and assume some debt. Spartan intends to use the net proceeds from the transaction to reduce outstanding bank borrowings. The transaction is expected to be complete within 45 days.
Spartan Stores and its subsidiaries generated $720 million in sales during the last fiscal year from its distribution facilities in Grand Rapids and Louisville, Kentucky.
"The transaction is an ideal strategic fit for Hackney, as it provides a strong complement to our existing products, customers, and geographic distribution network," said Bill Sansom, chairman and chief executive of H.T. Hackney.