Supervalu, Eden Prairie, Minn., completed its sale of Save-A-Lot to an affiliate of Onex Corp. for $1.365 billion in cash Monday.
Supervalu and Save-A-Lot have now commenced a five-year professional services agreement under which Supervalu will provide certain back office services to Save-A-Lot.
“With the successful completion of the Save-A-Lot sale, we are well positioned for the future with a stronger balance sheet, the opportunity to more strategically invest in our business, and the ability to more keenly focus on our core business as a leading grocery wholesaler,” said Supervalu President and CEO Mark Gross in a statement. “We also look forward to continuing our relationship with Save-A-Lot as one of our important professional services customers.”
Supervalu has used $750 million of the net proceeds from the sale to prepay that portion of its outstanding term loan balance. It will use the remaining proceeds to further reduce debt and improve its capital structure, contribute to its pension plan and fund corporate and growth initiatives.