GRAND RAPIDS, Mich. — The marriage of Spartan Stores and Nash Finch was completed last week with the combined company saying they’d take on a new corporate identity — SpartanNash — and maintain residence at Spartan’s Michigan headquarters.
The announcement followed shareholders of Spartan and Nash voting separately last week to approve the $1.3 billion merger, which was announced in July. The combination unites the regional retailer-distributors into an entity with around $7.5 billion in annual sales.
The company said the official name change would take place following its annual meeting in May but last week revealed the name as well as a new website and logo. The combined company will continue to conduct business as Spartan Stores, Nash Finch and MDV in their respective markets.
Although the company said it expected to realize more than $100 million in synergies over the next three years it was unclear last week what approach it would take to consolidating distribution facilities, retail banners or corporate brands. The companies combine to operate 22 distribution facilities and stores under 14 different banners.
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The company last week also revealed a new board of directors and an executive team which, as expected, is led by veterans of Spartan. In addition to Craig Sturken, who will serve as chairman, and Dennis Eidson, chief executive officer of Spartan Stores and now SpartanNash, board members include: M. Shan Atkins, Frank M. Gambino, Yvonne R. Jackson, Elizabeth A. Nickels and Timothy J. O’Donovan, former members of the board of directors of Spartan Stores; and William R. Voss, Mickey P. Foret, Douglas A. Hacker and Hawthorne L. Proctor, former members of the board of directors of Nash Finch.
The nine-member executive team led by Eidson includes three former Nash officers: Ed Brunot, executive vice president and president of the MDV military division; Kathy Mahoney, EVP, general counsel and secretary; and Peter O’Donnell, vice president, chief accounting officer/controller. Eidson’s Spartan team including Dave Staples, chief financial officer; Ted Adornato, EVP retail operations; Dave Crouch, chief information officer; Alex DeYonker, chief legal officer; Derek Jones, EVP, food distribution, remain in their roles.
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Former Nash executives including CEO Alec Covington will be terminated effective Dec. 31.
Although Nash shareholders last week approved the merger with Spartan by a 98% margin, 74% voted against payouts to Nash executives including Covington who in accordance with his employment agreement was to receive more than $6 million in cash. That vote, however, was nonbinding.
In the meantime $2.75 million in incentives from local and state economic development agencies assures SpartanNash will maintain headquarters in Western Michigan, the company said. The incentives ensures the retention of 620 existing jobs and the creation of 72 new jobs, while proving the flexibility to support an additional 300 new jobs for future growth, according to The Right Place Inc., a local economic development agency, which arranged the package in collaboration with the Michigan Economic Development Corporation and Byron Township.
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Along with completing the merger, SpartanNash has changed its fiscal year end from the last Saturday in March to the Saturday closest to Dec. 31. This date change results in a transition period with a 15-week third quarter this year versus a 16-week third quarter last year, and a 39-week fiscal year ending Dec. 28, versus a 52-week fiscal year ending March 30. Approximately six weeks of Nash Finch’s sales and earnings contributions will be included in Spartan’s third quarter and fiscal year results.
SpartanNash said it expects that the transaction will create cost synergies of approximately $20 million, $35 million and $52 million in fiscal years 2014, 2015 and 2016, respectively. Integration and transaction closing related costs of approximately $17 million to $18 million will be recorded in the quarter ended Dec. 28.
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