EMERYVILLE, Calif. - Grocery Outlet Holding Corp. (NASDAQ: NASDAQ:GO) announced its agreement to acquire United Grocery Outlet, a discount grocery retailer operating in the Southeastern U.S., from affiliates of Gen Cap America, Inc. and UGO management. The deal, expected to close early in the second quarter, will introduce Grocery Outlet into six new states: Tennessee, North Carolina, Georgia, Alabama, Kentucky, and Virginia, adding 40 stores and a distribution center to its network.
RJ Sheedy, President and CEO of Grocery Outlet, highlighted the compatibility of the two companies, citing their similar buying strategies and commitment to community service. Lisa Bryson, CEO of United Grocery Outlet, also expressed enthusiasm about joining forces with Grocery Outlet to expand their community impact.
The acquisition is part of Grocery Outlet's growth strategy, which includes opening an additional 15 to 20 stores within its existing markets in 2024. This expansion is projected to result in 55 to 60 net new stores for the year. The company anticipates that the acquisition will have a modest positive impact on its 2024 earnings.
Financial details of the transaction will be further discussed during Grocery Outlet's earnings call on Tuesday, February 27, 2024. BofA Securities served as the exclusive financial advisor, with Honigman LLP and Gould & Ratner LLP as legal advisors to Grocery Outlet. Stout provided financial advice, and Bass, Berry & Sims PLC offered legal counsel to Gen Cap and United Grocery Outlet for the transaction.
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