SUPERVALU INC. (NASDAQ:SVU) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
The information set forth in the Introductory Note is
incorporated herein by reference.
incorporated herein by reference.
In connection with the completion of the Sale, on December 5,
2016, Supervalu and Save-A-Lot entered into a Services Agreement
(the Services Agreement) whereby Supervalu will provide certain
professional services to Save-A-Lot for a term of five years, on
the terms and subject to the conditions set forth therein.
2016, Supervalu and Save-A-Lot entered into a Services Agreement
(the Services Agreement) whereby Supervalu will provide certain
professional services to Save-A-Lot for a term of five years, on
the terms and subject to the conditions set forth therein.
to the Services Agreement, Supervalu will provide Save-A-Lot
various technical, human resources, finance and other operational
services. Save-A-Lot paid Supervalu $30 million upon entry into
the Services Agreement, which will be credited against fees due
under the Services Agreement. The initial annual base charge
under the Services Agreement is $30 million, subject to
adjustments. In addition to these services, Save-A-Lot can
request new services through the change control procedures set
forth in the Services Agreement, and Supervalu may also agree to
conduct non-recurring projects for Save-A-Lot to project orders.
The services may be used by Save-A-Lot and its subsidiaries only
in connection with the Save-A-Lot hard discount business.
various technical, human resources, finance and other operational
services. Save-A-Lot paid Supervalu $30 million upon entry into
the Services Agreement, which will be credited against fees due
under the Services Agreement. The initial annual base charge
under the Services Agreement is $30 million, subject to
adjustments. In addition to these services, Save-A-Lot can
request new services through the change control procedures set
forth in the Services Agreement, and Supervalu may also agree to
conduct non-recurring projects for Save-A-Lot to project orders.
The services may be used by Save-A-Lot and its subsidiaries only
in connection with the Save-A-Lot hard discount business.
Save-A-Lot may terminate the Services Agreement in the event of
Supervalus material breach, if Supervalu breaches its non-compete
obligations under the Merger Agreement, if Supervalu is acquired
by a third party that engages in a Competing Business (as defined
in the Merger Agreement) or in the event of Supervalus bankruptcy
or insolvency, in each case, subject to certain limitations set
forth in the Services Agreement. In addition, Save-A-Lot may
terminate certain services or service categories if Supervalu
commits a breach that is material to the service category or if
Supervalu fails to meet certain minimum specified service levels,
in each case, subject to certain limitations set forth in the
Services Agreement. Supervalu may terminate the Services
Agreement in the event of Save-A-Lots material breach, for
Save-A-Lots failure to make timely payment, for certain legal or
regulatory changes and in the event of Save-A-Lots bankruptcy or
insolvency, in each case, subject to certain limitations set
forth in the Services Agreement. The Services Agreement generally
requires each party to indemnify the other party against
third-party claims arising out of the performance of or the
provision or receipt of services under the Services Agreement.
Supervalus material breach, if Supervalu breaches its non-compete
obligations under the Merger Agreement, if Supervalu is acquired
by a third party that engages in a Competing Business (as defined
in the Merger Agreement) or in the event of Supervalus bankruptcy
or insolvency, in each case, subject to certain limitations set
forth in the Services Agreement. In addition, Save-A-Lot may
terminate certain services or service categories if Supervalu
commits a breach that is material to the service category or if
Supervalu fails to meet certain minimum specified service levels,
in each case, subject to certain limitations set forth in the
Services Agreement. Supervalu may terminate the Services
Agreement in the event of Save-A-Lots material breach, for
Save-A-Lots failure to make timely payment, for certain legal or
regulatory changes and in the event of Save-A-Lots bankruptcy or
insolvency, in each case, subject to certain limitations set
forth in the Services Agreement. The Services Agreement generally
requires each party to indemnify the other party against
third-party claims arising out of the performance of or the
provision or receipt of services under the Services Agreement.
The foregoing description of the Services Agreement and certain
terms of the Merger Agreement does not purport to be complete and
is qualified in its entirety by reference to the Services
Agreement and the Merger Agreement, each of which are
incorporated herein by reference. The Services Agreement is filed
as Exhibit 10.1 hereto, and the Merger Agreement was filed as
Exhibit 2.1 to Supervalus Current Report on Form 8-K filed with
the SEC on October 17, 2016. Supervalu has also applied to the
Securities and Exchange Commission (the SEC) for confidential
treatment of certain portions of Exhibit 10.1. Omitted material
for which confidential treatment has been requested has been
separately filed with the SEC.
terms of the Merger Agreement does not purport to be complete and
is qualified in its entirety by reference to the Services
Agreement and the Merger Agreement, each of which are
incorporated herein by reference. The Services Agreement is filed
as Exhibit 10.1 hereto, and the Merger Agreement was filed as
Exhibit 2.1 to Supervalus Current Report on Form 8-K filed with
the SEC on October 17, 2016. Supervalu has also applied to the
Securities and Exchange Commission (the SEC) for confidential
treatment of certain portions of Exhibit 10.1. Omitted material
for which confidential treatment has been requested has been
separately filed with the SEC.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth in the Introductory Note is
incorporated herein by reference.
incorporated herein by reference.
On December 5, 2016, Supervalu sold its Save-A-Lot business to
the Purchaser for a purchase price of $1.365 billion in cash,
subject to customary closing adjustments. The Sale was effected
to the terms of the Merger Agreement, whereby Merger Sub merged
with and into Save-A-Lot (the Merger), with Save-A-Lot surviving
the Merger as a wholly owned subsidiary of Purchaser.
the Purchaser for a purchase price of $1.365 billion in cash,
subject to customary closing adjustments. The Sale was effected
to the terms of the Merger Agreement, whereby Merger Sub merged
with and into Save-A-Lot (the Merger), with Save-A-Lot surviving
the Merger as a wholly owned subsidiary of Purchaser.
The foregoing description of the Sale, the Merger and the Merger
Agreement does not purport to be complete and is qualified in its
entirety by reference to the Merger Agreement, which is
incorporated herein by reference. The Merger Agreement was filed
as Exhibit 2.1 to Supervalus Current Report on Form 8-K filed
with the SEC on October 17, 2016.
Agreement does not purport to be complete and is qualified in its
entirety by reference to the Merger Agreement, which is
incorporated herein by reference. The Merger Agreement was filed
as Exhibit 2.1 to Supervalus Current Report on Form 8-K filed
with the SEC on October 17, 2016.
The Unaudited Pro Forma Condensed Consolidated Financial
Statements of Supervalu and the related notes thereto giving
effect to the Sale are attached hereto as Exhibit 99.2.
Statements of Supervalu and the related notes thereto giving
effect to the Sale are attached hereto as Exhibit 99.2.
Item 2.04. Triggering Events that Accelerate or Increase a Direct
Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
The information set forth in the Introductory Note is
incorporated herein by reference.
incorporated herein by reference.
In connection with the completion of the Sale, on December 5,
2016, Supervalu prepaid $750 million of outstanding loans under
its existing senior secured term loan to and as required by the
terms of the Second Amended and Restated Credit Agreement, dated
as of January 31, 2014 (as amended, the Credit Agreement), among
Supervalu, as borrower, the subsidiaries of the Company named as
guarantors therein, Goldman Sachs Bank USA, as administrative
agent and as collateral agent, and the lenders from time to time
party thereto, because the Sale constitutes a Moran Sale (as
defined in the Credit Agreement). to the Credit Agreement, the
Company is required within 10 days of completion of the Sale to
make an additional prepayment of outstanding loans under the
Credit Agreement in an amount currently estimated to be $75
million, which represents 50% of the Net Cash Proceeds (as
defined in the Credit Agreement) in excess of $750 million up to
an aggregate amount that would cause the Companys Total Secured
Leverage Ratio (as defined in the Credit Agreement), on a pro
forma basis after giving effect to such prepayment, to be no
higher than 1.50:1.00.
2016, Supervalu prepaid $750 million of outstanding loans under
its existing senior secured term loan to and as required by the
terms of the Second Amended and Restated Credit Agreement, dated
as of January 31, 2014 (as amended, the Credit Agreement), among
Supervalu, as borrower, the subsidiaries of the Company named as
guarantors therein, Goldman Sachs Bank USA, as administrative
agent and as collateral agent, and the lenders from time to time
party thereto, because the Sale constitutes a Moran Sale (as
defined in the Credit Agreement). to the Credit Agreement, the
Company is required within 10 days of completion of the Sale to
make an additional prepayment of outstanding loans under the
Credit Agreement in an amount currently estimated to be $75
million, which represents 50% of the Net Cash Proceeds (as
defined in the Credit Agreement) in excess of $750 million up to
an aggregate amount that would cause the Companys Total Secured
Leverage Ratio (as defined in the Credit Agreement), on a pro
forma basis after giving effect to such prepayment, to be no
higher than 1.50:1.00.
In connection with the Sale, the Company entered into an
agreement with the Pension Benefit Guarantee Corporation (PBGC)
under which, among other things, the Company has agreed to make
certain contributions to its qualified pension plan in excess of
any required minimum contributions and to repay any outstanding
balance under the Companys $1,000 million asset-based revolving
ABL credit facility at the time of the Sale.
agreement with the Pension Benefit Guarantee Corporation (PBGC)
under which, among other things, the Company has agreed to make
certain contributions to its qualified pension plan in excess of
any required minimum contributions and to repay any outstanding
balance under the Companys $1,000 million asset-based revolving
ABL credit facility at the time of the Sale.
The foregoing description of the Credit Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Credit Agreement, which is incorporated herein
by reference. The Credit Agreement was filed as Exhibit 10.1 to
the Current Report on Form 8-K filed with the SEC on February 2,
2014, and the Third Amendment and Consent Agreement to the Credit
Agreement was filed as Exhibit 10.1 to the Current Report on Form
8-K filed with the SEC on May 23, 2016.
purport to be complete and is qualified in its entirety by
reference to the Credit Agreement, which is incorporated herein
by reference. The Credit Agreement was filed as Exhibit 10.1 to
the Current Report on Form 8-K filed with the SEC on February 2,
2014, and the Third Amendment and Consent Agreement to the Credit
Agreement was filed as Exhibit 10.1 to the Current Report on Form
8-K filed with the SEC on May 23, 2016.
Item 7.01. Regulation FD Disclosure.
Exhibit 99.3 to this Current Report on Form 8-K provides
supplemental consolidated and segment financial information for
the year-to-date periods (28 weeks) ended September 10, 2016 and
September 12, 2015, and for Supervalus fiscal year ended February
27, 2016 that reflects the recast segment presentation described
in Item 9.01 hereof and is incorporated by reference in this Item
7.01. The information in this Item 7.01, including Exhibit 99.3,
shall not be deemed filed with the SEC for purposes of Section 18
of the Securities Exchange Act of 1934 or otherwise subject to
the liabilities of that Section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act
of 1933 or the Securities Exchange Act of 1934, regardless of any
general incorporation language in such filing.
supplemental consolidated and segment financial information for
the year-to-date periods (28 weeks) ended September 10, 2016 and
September 12, 2015, and for Supervalus fiscal year ended February
27, 2016 that reflects the recast segment presentation described
in Item 9.01 hereof and is incorporated by reference in this Item
7.01. The information in this Item 7.01, including Exhibit 99.3,
shall not be deemed filed with the SEC for purposes of Section 18
of the Securities Exchange Act of 1934 or otherwise subject to
the liabilities of that Section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act
of 1933 or the Securities Exchange Act of 1934, regardless of any
general incorporation language in such filing.
Item 8.01. Other Events.
On December 5, 2016, Supervalu issued a press release announcing
the completion of the Sale, a copy of which is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
the completion of the Sale, a copy of which is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
Forward-Looking Statements
Except for the historical and factual information contained
herein, the matters set forth in this report, particularly those
pertaining to SUPERVALUs expectations, guidance or future
operating results, and other statements identified by words such
as estimates, expects, projects, plans, intends, and similar
expressions are forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject
to risks and uncertainties that may cause actual results to
differ materially, including competition, ability to execute
operations and initiatives, ability to realize benefits from
acquisitions and dispositions, reliance on wholesale customers
ability to grow, ability to maintain or increase margins,
substantial indebtedness, labor relations issues, escalating
costs of providing employee benefits, relationships with
Save-A-Lot, including the services agreement entered into in
connection with the sale of the Save-A-Lot business, Albertsons
LLC and New Albertsons Inc., intrusions to and disruption of
information technology systems, impact of economic conditions,
commodity pricing, governmental regulation, food and drug safety
issues, legal proceedings, pharmacy reimbursement and health care
financing, intellectual property protection, severe weather,
natural disasters and adverse climate changes, disruption to
supply chain and distribution network, changes in military
business, adequacy of insurance, volatility in fuel and energy
costs, asset impairment charges, fluctuations in our common
herein, the matters set forth in this report, particularly those
pertaining to SUPERVALUs expectations, guidance or future
operating results, and other statements identified by words such
as estimates, expects, projects, plans, intends, and similar
expressions are forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject
to risks and uncertainties that may cause actual results to
differ materially, including competition, ability to execute
operations and initiatives, ability to realize benefits from
acquisitions and dispositions, reliance on wholesale customers
ability to grow, ability to maintain or increase margins,
substantial indebtedness, labor relations issues, escalating
costs of providing employee benefits, relationships with
Save-A-Lot, including the services agreement entered into in
connection with the sale of the Save-A-Lot business, Albertsons
LLC and New Albertsons Inc., intrusions to and disruption of
information technology systems, impact of economic conditions,
commodity pricing, governmental regulation, food and drug safety
issues, legal proceedings, pharmacy reimbursement and health care
financing, intellectual property protection, severe weather,
natural disasters and adverse climate changes, disruption to
supply chain and distribution network, changes in military
business, adequacy of insurance, volatility in fuel and energy
costs, asset impairment charges, fluctuations in our common
stock price and other risk factors relating to our business or
industry as detailed from time to time in SUPERVALUs reports
filed with the SEC. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of
this report. Unless legally required, SUPERVALU undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
industry as detailed from time to time in SUPERVALUs reports
filed with the SEC. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of
this report. Unless legally required, SUPERVALU undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The Unaudited Pro Forma Condensed Consolidated Financial
Statements of the Company for the fiscal years ended February 27,
2016, February 28, 2015 and February 22, 2014, the year-to-date
periods (28 weeks) ended September 10, 2016 and September 12,
2015, and as of September 10, 2016 are filed as Exhibit 99.2 to
this Current Report on Form 8-K.
Statements of the Company for the fiscal years ended February 27,
2016, February 28, 2015 and February 22, 2014, the year-to-date
periods (28 weeks) ended September 10, 2016 and September 12,
2015, and as of September 10, 2016 are filed as Exhibit 99.2 to
this Current Report on Form 8-K.
(d) Exhibits.
|
Exhibit Number
|
Description
|
|
|
10.1
|
Services Agreement, dated as of December 5, 2016,
between SUPERVALU INC. and Moran Foods, LLC.* |
|
|
99.1
|
Press Release, dated December 5, 2016.
|
|
|
99.2
|
Unaudited Pro Forma Condensed Consolidated Financial
Statements of SUPERVALU INC. |
|
|
99.3
|
Historical Segment Financial Information and
Supplemental Non-GAAP and Pro Forma Financial Information of SUPERVALU INC. |
* Application has been made to the Securities and Exchange
Commission for confidential treatment of certain portions of this
exhibit. Omitted material for which confidential treatment has
been requested has been separately filed with the Securities and
Exchange Commission.
Commission for confidential treatment of certain portions of this
exhibit. Omitted material for which confidential treatment has
been requested has been separately filed with the Securities and
Exchange Commission.
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About SUPERVALU INC. (NASDAQ:SVU)