SUPERVALU Announces Agreement to Acquire Total Logistics, Inc.
January 04 2005 - 7:13PM
PR Newswire (US)
SUPERVALU Announces Agreement to Acquire Total Logistics, Inc.
Acquisition Provides SUPERVALU Critical Mass In Third-Party
Logistics MINNEAPOLIS, Jan. 4 /PRNewswire-FirstCall/ -- SUPERVALU
INC. (NYSE:SVU) announced today that it has signed an agreement and
plan of merger with Total Logistics, Inc. (NASDAQ:TLCX), an
industry-leading national provider of integrated third-party
logistic services with calendar 2004 nine-month revenues of $253
million. Under the terms of the agreement, which was unanimously
approved by both companies' boards of directors, SUPERVALU will pay
$28.50 in cash for each Total Logistics, Inc. share and will assume
Total Logistics, Inc. outstanding debt, which is estimated to total
approximately $68 million at closing. With approximately 5.7
million fully diluted Total Logistics, Inc. shares outstanding, the
aggregate transaction value is approximately $233 million,
including assumed debt and transaction expenses. The acquisition,
which is subject to certain conditions, is anticipated to close
within 45 days. SUPERVALU expects the acquisition to be slightly
accretive to fiscal year 2006. Jeff Noddle, chairman and CEO of
SUPERVALU, stated: "We have been looking for the right partner to
obtain critical mass and solidify our commitment to third-party
logistics and we have found the perfect fit in Total Logistics,
Inc. This company has an impressive position in third-party
logistics with its proven management team, a blue-chip customer
base and a full suite of integrated service solutions. The
combination of SUPERVALU's scale and supply chain competence
together with Total Logistics, Inc. and its nationally recognized
reputation in third-party logistics will unlock new growth
opportunities." William T. Donovan, president and CEO of Total
Logistics, Inc., said: "We are proud that we have built Total
Logistics, Inc. into a recognized company with national reach, and
we believe the best path to future growth is to team with SUPERVALU
whose size and resources can maximize the potential of the
third-party logistics opportunity." For the nine months ended Sept.
30, 2004, Total Logistics, Inc. reported revenues of $253.3
million, up 25 percent. EBITDA for the nine months was $15.6
million, or 6.2 percent of revenues, up 24 percent. Total
Logistics, Inc. is a Milwaukee-based holding company; its two
wholly owned subsidiaries, Total Logistic Control (TLC) and Zero
Zone, employ about 3,000 people. TLC contributes the majority of
the company's revenues by offering a broad service suite including
warehouse management, transportation, procurement, contract
manufacturing and logistics engineering and management services.
TLC's customers consist of local, regional, national, and
international firms engaged in food and beverage manufacturing,
consumer and industrial product manufacturing, wholesale
distribution and retailing. Within the last 12 months, TLC has
secured a number of new logistics contracts, including agreements
with Kraft Foods, Sara Lee and Kellogg's. TLC manages more than 30
facilities around the country providing end-to-end supply chain
solutions to customers. Zero Zone is a successful niche
manufacturer of refrigerated and frozen display cases serving the
grocery, convenience, dollar and drug store chains. In addition,
the company produces refrigeration systems and racks to power and
control the refrigeration systems, electrical panels and stand-by
power for both retail and industrial applications. Zero Zone is
known as a pioneer for innovations like improved case lighting and
energy efficiency. Noddle added, "TLC, with its premier status in
the third-party logistics industry, gives SUPERVALU an
infrastructure and platform from which to realize the exciting
growth potential. We're also delighted by the prospect of serving
Total Logistics, Inc.'s roster of world-class customers." The
transaction will be structured as a tender offer for Total
Logistics, Inc. shares. In accordance with the terms of the
agreement, not later than January 11, 2005, a wholly owned
subsidiary of SUPERVALU will offer to acquire all of the
outstanding shares of Total Logistics, Inc. common stock at $28.50
per share in cash. The tender offer will be subject to at least 75
percent of the outstanding Total Logistics, Inc. shares, on a fully
diluted basis, being validly tendered and not withdrawn. The Total
Logistics, Inc. board of directors today unanimously approved the
offer and recommended shareholder acceptance. The board members
control approximately 70 percent of the outstanding shares on a
fully diluted basis. The tender offer will be subject to regulatory
approvals and other customary conditions. Following the close of
the tender, any shares not tendered will be acquired at $28.50 per
share in cash in a subsequent merger. Lazard acted as financial
advisor to SUPERVALU and will serve as the dealer manager on the
tender offer. William Blair & Co. served as financial advisor
to Total Logistics, Inc. About Total Logistics, Inc. Total
Logistics, Inc. is a Milwaukee-based public company operating
through two wholly owned businesses, Total Logistic Control and
Zero Zone. Additional corporate data can be found at
http://www.totallogisticsinc.com/ . Total Logistic Control (TLC),
based in Zeeland, Michigan, is a national provider of integrated
logistics services which include refrigerated and dry warehousing,
transportation operations, supply chain management, dedicated
third-party facility and operations management, food distribution,
bottling and packaging and fulfillment services. TLC provides
end-to-end supply chain services to a number of major U.S. food and
consumer product companies. Operations are conducted through a
national network of more than 30 logistic centers with 57.2 million
cubic feet of refrigerated capacity and over 3.2 million square
feet of dry warehouse space, making it the tenth-largest provider
of refrigerated warehousing services in the United States. TLC
operates a fleet of 435 tractors with 825 refrigerated and dry
trailers with five maintenance facilities. TLC was recently cited
by Inbound Logistics as a Top 10 Provider of Third Party Logistics
Excellence for the seventh year in a row. More information about
TLC is available at http://www.totallogistic.com/ . Zero Zone,
headquartered in North Prairie, Wisconsin, is a manufacturer of
high quality refrigerated and freezer display cases used in
grocery, convenience, dollar and drug store chains for retail
merchandising of food, beverage and floral products as well as
refrigeration houses and racks to power and control the
refrigeration systems, electrical panels, and stand-by power for
both retail and industrial applications. More information about
Zero Zone is available at http://www.zero-zone.com/ . About
SUPERVALU INC. Celebrating its 135th year of fresh thinking,
SUPERVALU INC., a Fortune 100 company, is one of the largest
companies in the United States grocery channel. With annual
revenues of approximately $20 billion, SUPERVALU holds leading
market share positions across the U.S. with its more than 1,500
retail grocery locations, including licensed Save-A-Lot locations.
With its Save-A- Lot format, the company holds the number one
market position in the extreme value grocery retail sector. Through
SUPERVALU's geographically diverse distribution network, the
company provides distribution and related logistics support
services to nearly 4,500 grocery retailers across the nation. In
addition, SUPERVALU's third-party logistics business provides
end-to-end supply chain management solutions that deliver value for
manufacturers, consumer products retailers and food service
customers. SUPERVALU currently has more than 55,000 employees. For
more information about SUPERVALU visit http://www.supervalu.com/ .
Webcast Information There will be a webcast and conference call to
discuss this announcement at 9:00 a.m. Central time tomorrow,
Wednesday, January 5. A live webcast of the conference call will be
available at http://www.supervalu.com/ . Interested parties should
dial 1-888-862-6557 at least five minutes prior to the call. An
archive of the call is accessible via telephone by dialing
1-630-652-3041 with pass code 10664731# and through the Web site at
http://www.supervalu.com/ . The conference call archive will be
available for two weeks. Statements made in this release concerning
the Company's or management's intentions, expectations, or
predictions about future results or events are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements reflect management's current
expectations or beliefs, and are subject to risks and uncertainties
that could cause actual results or events to vary from stated
expectations, which variations could be material and adverse.
Factors that could produce such a variation include, but are not
limited to, the following: the possible inability to complete the
Total Logistics, Inc., acquisition; the risks and uncertainties
associated with successfully integrating the two companies; the
ability to retain key personnel; the inherent unreliability of
earnings, revenue and cash flow predictions due to numerous
factors, many of which are beyond the Company's control;
developments in the demand for each companies' products and
services; relationships with major customers and suppliers;
unanticipated delays, costs and expenses inherent in the
development and marketing of new products and services; the impact
of governmental laws and regulations; and competitive factors. Our
forward-looking statements speak only as of the time made, and we
assume no obligation to publicly update any such statements.
Additional information concerning these and other factors that
could cause actual results and events to differ materially from the
Company's current expectations are contained in the Company\'s Form
10-Q for the period ending September 11, 2004. This announcement is
neither an offer to purchase nor a solicitation of an offer to sell
shares of Total Logistics, Inc. SUPERVALU will be filing a tender
offer statement with the Securities and Exchange Commission (SEC)
and Total Logistics, Inc. will be filing a
solicitation/recommendation statement with respect to the offer.
Total Logistics, Inc. shareholders are advised to read the tender
offer statement regarding the acquisition of Total Logistics, Inc.
referenced in this news release, and the related
solicitation/recommendation statement when those statements are
made available to them. The tender offer statement and the
solicitation/recommendation statement will contain important
information, which should be read carefully before any decision is
made with respect to the offer. These documents will be made
available to all shareholders of Total Logistics, Inc. at no
expense to them. These documents will also be available at no
charge on the SEC's web site at http://www.sec.gov/. Stockholders
may also obtain copies of these documents without charge by
requesting them from Total Logistics, Inc. in writing at 700 N.
Water St., Suite 1200, Milwaukee, WI 53202, or by phone at (414)
291-9000. DATASOURCE: SUPERVALU INC. CONTACT: Media, Lynne High,
+1-952-828-4515, , or Investors, Yolanda Scharton, +1-952-828-4540,
, both of SUPERVALU INC. Web site: http://www.totallogistic.com/
http://www.zero-zone.com/ http://www.supervalu.com/
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