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Spartan-Nash Merger Allows Flexibility

GRAND RAPIDS, Mich. — The planned merger between Spartan Stores here and Nash Finch Co. will leave plenty of room on the balance sheet for more acquisitions if the right situation arises, executives told analysts in a conference call on Monday.

“At the close of the transaction, we will have a capital structure that supports continued growth initiatives, including potential acquisitions,” said Dennis Eidson, president and chief executive officer of Spartan Stores, who will remain in that capacity at the combined companies.


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In conjunction with the merger, Spartan enter into a new $1 billion credit facility that will be used to repay outstanding borrowing for both companies along with transaction-related expenses. Eidson said the company expects to have “approximately $190 million in availability beyond the capital needs of the business that can be used for strategic growth opportunities.”

Both companies have been active in rolling up their wholesale customers into their company-owned retail portfolio.

“This is a company that is going to have enormous financial capacity to do what it deems is necessary and in the best interest of shareholders to continue the story and continue to grow,” said Alec Covington, president and chief executive officer, Nash Finch.

Read more: Spartan, Nash Finch to Merge

As reported Monday, the two companies agreed to merge in an all-stock transaction valued at $1.3 billion. Shareholders of Nash Finch would receive 1.2 shares of Spartan Stores for each share they own.

Shares in both companies traded up about 3% to 4% on Monday following the announcement.

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