Canadian private equity firm Onex Corporation is buying discount grocery chain Save-A-Lot for $1.37 billion in cash, the companies said Monday.
Minneapolis-based Save-A-Lot is owned by parent company Supervalu, which had been looking to offload the no-frills chain, which is known for attracting bargain shoppers with its low prices.
Save-A-Lot has 1,368 stores across 37 states, the Caribbean and Central America, including a store at Northgate Center in McMinnville. When contacted Friday, management at our local store did not expect any changes.
Of its 1,370 stores, Save-A-Lot owns 472, and licenses and supplies another 896. The McMinnville store is not owned by Save-A-Lot and is one of the 896 operated through another party.
Supervalu will still own 1,974 stores not associated with the Save-A-Lot chain. Supervalu said it will use cash from the transaction to pay down debt.
Save-A-Lot has fared well in the increasingly competitive grocery business thanks to its prices, with revenue rising 26 percent last year. However, it recently warned the falling cost of food and the lower distribution of food stamps is hurting its business.
The acquisition is expected to be complete by early 2017, subject to regulatory approvals and other customary closing conditions. Supervalu has agreed to continue providing Save-A-Lot with certain day-to-day operations support, including merchandising technology and payroll, for the next five years.
Typical Save-A-Lot stores are 15,000 to 20,000 square feet. It sells national brands, store brands, and has a selection of meat and produce.