TEMPLE, Texas -- McLane Co. here has signed a letter of intent to sell the assets of its specialty foods distribution subsidiary, McLane America, to Tree of Life Inc., a distributor based in St. Augustine, Fla.
Unlike most of McLane, McLane America has been a supplier to supermarkets. Products include gourmet, ethnic and health food items. McLane was having trouble in the supermarket sector because of its Wal-Mart links, the company said. McLane Co. is a unit of Wal-Mart Stores, Bentonville, Ark. Terms of the deal weren't disclosed. The transaction is expected to close April 19. "With our Wal-Mart relationship, McLane America had difficulty growing its customer base," said Grady Rosier, president and chief executive officer of McLane Co., in a statement. "This sale provides the McLane America specialty food business a greater growth opportunity in the supermarket industry." Explained Chance Weaver, trade relations specialist for McLane Co.: "There was the perception among supermarkets that buying from McLane was like buying from the competition."
McLane America, with operations here and in Salt Lake City, has annual sales of about $60 million and employs 300 people. McLane's overall sales in 1995 were $8.1 billion. Tree of Life is a large distributor of natural and specialty foods in the United States, with a nationwide network of distribution centers. The company posted 1995 sales of $540 million. Tree of Life is a unit of Netherlands-based Koninklijke BolsWessanen NV.
Following the sale of the specialty unit, McLane will close the Temple distribution center for McLane America, the company said. All employees (fewer than 70) in the Temple facility will be offered comparable jobs at either McLane/Southwest or McLane Foodservice here.
In a statement, Rick Thorne, chairman of Tree of Life, said the acquisition of McLane America would expand the Gourmet Award Foods division into the West and would complement the other Gourmet Award Foods distribution centers in Albany, N.Y.; St. Paul, Minn., and Dallas. Some observers have said Wal-Mart hoped McLane's distribution savvy would help Wal-Mart's supercenter buildup efforts. Keith Morris, public relations coordinator for Wal-Mart, said that while McLane may be helpful in those efforts, the sale of the McLane America unit won't detract in any way from the supercenter goals.
McLane Co. distributes food and other items both to convenience stores and to formats operated by Wal-Mart.
