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SpartanNash stock warrant offers company stake to Amazon

E-commerce giant poised to become one of distributor’s largest institutional investors

Russell Redman

October 9, 2020

3 Min Read
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The aggregate shares offered through the warrant to Amazon represent a total investment of $96.4 million and about 15% of SpartanNash’s shares outstanding.SpartanNash

SpartanNash has issued a stock warrant to an Amazon.com Inc. affiliate that would enable the e-commerce giant to become one of the grocery distributor’s largest institutional shareholders.

In an 8-K filing this week with the Securities and Exchange Commission, SpartanNash said it issued a warrant to Amazon subsidiary NV Investment Holdings LLC that would enable it to buy up to 5,437,272 shares of common stock at about $17.7257 per share, or a $96.4 million total investment, through Oct. 7, 2027.

The aggregate number of shares offered through the warrant represent about 15% of SpartanNash’s current 35,833,252 shares outstanding. The warrant vested with 1,087,455 shares upon issuance, according to the Oct. 7 SEC filing.

Among SpartanNash’s largest institutional shareholders, BlackRock is the only one holding at least 5 million shares of the distributor, with more than 5.74 million shares. The next largest institutional investor, Dimensional Fund Advisors LP, holds nearly 3.05 million shares of SpartanNash.

News of the warrant hoisted SpartanNash’s share price on Friday. The company’s common stock opened at $19.20 and jumped to around $23 as of noon trading.

SpartanNash said in Wednesday’s SEC filing that the warrant for the Amazon affiliate comes “in connection with its entry into a commercial agreement with Amazon.” The Grand Rapids, Mich.-based food wholesaler has had Amazon as a customer for at least four years.

Related:SpartanNash sees potential with Amazon

In May 2016, then-SpartanNash Chief Operating Officer and former CEO David Staples said in an earnings call that the company had recently added Amazon as an account. He said the relationship encompassed supplying dry and chilled dry and chilled groceries to Amazon distribution centers, including support of the Seattle-based e-tailer’s Amazon Prime Now grocery delivery program and emerging AmazonFresh perishables delivery service.

“We’re excited about our relationship with Amazon,” Staples said at the time. “While still a relatively new account, the volume has been greater than we expected, and we believe that it has significant growth potential.”

In October 2019, Amazon made the AmazonFresh delivery a free service for members of its Prime customer benefits program on orders of $35 or more. The move essentially made free grocery delivery part of the Prime benefits package, since Amazon’s Prime Now and Prime Pantry programs already offered free delivery on orders of at least $35. Prime Now also includes delivery and pickup from Whole Foods Market stores in select areas. Groceries ordered through AmazonFresh, currently available in about 20 major markets, are delivered from Amazon fulfillment centers. Groceries ordered through AmazonFresh are delivered from Amazon fulfillment centers.

Related:SpartanNash names ex-Borden CEO Tony Sarsam new chief executive

Amazon has since brought that banner to a new grocery store concept, called Amazon Fresh. The first store opened this past August in Woodland Hills, Calif., and Amazon has disclosed six other upcoming Amazon Fresh store locations, including North Hollywood, Irvine and Northridge, Calif., as well as Naperville, Oak Lawn and Schaumburg, Ill.

Currently, SpartanNash’s biggest food distribution customer is Dollar General, which accounted for 17% of the wholesaler’s fiscal 2019 net sales. SpartanNash describes itself as the nation’s fifth-largest food distributor, operating 12 grocery distribution centers and seven military DCs. The company also operates 155 corporate-owned supermarkets in nine states and supplies more than 2,100 independent grocers nationwide.

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About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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