Tuesday, September 04, 2001
Background information
Zaandam, The Netherlands, September 4, 2001 Ahold, the international food retail and foodservice company, today announced it has entered into an agreement to acquire all the outstanding shares of Brunos Supermarkets, Inc. (Brunos Supermarkets). Brunos Supermarkets is a prominent food retailer in the Southeastern USA with 184 stores (of which 169 are supermarkets) operating under various banners in Alabama, Florida, Mississippi, and Georgia. Ahold will also be acquiring an affiliated company, Brunos, Inc., which holds seven parcels of property that are leased to Brunos Supermarkets. Brunos Supermarkets fiscal 2000 net sales amounted to approximately USD 1.65 billion. On a combined basis with Brunos, Inc., its fiscal 2000 EBITDA totaled approximately USD 60 million.
Natural fit with Ahold
Brunos Supermarkets is a regional chain and a natural fit with Ahold, creating opportunities for Ahold to serve customers in the Southern region of the United States. The company adds supermarkets to Ahold in a number of new areas in the South, particularly in Alabama, Mississippi and Northern Florida. Ahold estimates that total synergies from the transaction will be approximately USD 35 million in the first full year of combined operations, increasing to USD 50 million in the third year. In addition, Brunos Supermarkets has considerable opportunities for growth in Southeastern USA. Headquartered in Birmingham, Alabama, Brunos Supermarkets currently employs approximately 14,000 people.
Brunos Supermarkets to be Aholds 6th retail operating company
Brunos Supermarkets, founded in 1932, uses three principal formats: supermarkets, upscale superstores and neighborhood stores. The 120 supermarkets operate under the Food World and Food Max banners and are known for their competitive pricing. With 30 stores, the more traditional superstore format operates under the name Brunos Supermarkets and aims to provide exceptional service and quality. The 18 neighborhood stores go by the name of Food Fair. Continuous promotion of the fresh departments in each of these formats differentiates Brunos Supermarkets from strong local competition. In addition, the company operates one distribution center, 13 liquor stores, two gas stations and one pharmacy.
The anticipated closing of this acquisition by the first quarter of 2002, pending regulatory approval, will make Brunos Supermarkets the 6th U.S. retail company in Ahold. The addition of Brunos Supermarkets to the existing Ahold retail companies Stop & Shop, Giant-Landover, Giant-Carlisle, Tops and BI-LO will bring the total number of Aholds U.S. stores to almost 1,600. Ahold also has significant foodservice operations throughout the United States.
Financial details of transactions
To acquire Brunos Supermarkets and Brunos, Inc., Ahold will pay USD 500 million, although the purchase price is subject to adjustments based on the stockholders equity of Brunos Supermarkets and Brunos, Inc. at the time of closing. The acquisitions are subject to shareholder approval. Sufficient holders of outstanding shares of common stock of Brunos Supermarkets and Brunos, Inc. (75%) have agreed to vote their shares in favor of the transactions. The transactions are expected to close by the first quarter of 2002, pending regulatory approval, and will be partially financed through an equity offering commencing today.
Remarks by Bill Grize, President & CEO of Ahold USA
We are delighted to welcome Brunos Supermarkets on board as our 6th retail operating company, said Bill Grize, member of the Ahold Corporate Executive Board and President & CEO of Ahold USA. We have watched the company develop over the last few years, and have been impressed with how it has emerged as a strong regional operator. We are excited about entering new territories and serving new customers. We think that the synergy potential of this acquisition, and the additional experience from Aholds management team will benefit Brunos Supermarkets customers tremendously. Together with Brunos Supermarkets solid management team, we believe there are various opportunities to grow the business upon its integration into the Ahold family. Strategically, Brunos Supermarkets is a good match with Ahold, and we look forward to continuing to offer customers a superior shopping experience.
Remarks by James Demme, President & CEO of Brunos Supermarkets
We are excited that our company is joining forces with the Ahold group, said James Demme, President & CEO of Brunos Supermarkets. Joining forces with Ahold makes us more competitive, and opens up new growth channels to improve existing operations. We see various opportunities in the Southeastern market and we are eager to further expand our presence in the marketplace.
Ahold in the United States
Ahold has been active in the United States since 1977. With five retail operating companies Stop & Shop, Giant-Landover, Giant-Carlisle, Tops and BI-LO Ahold currently operates almost 1,400 stores, of which 1,050 are supermarkets, along the eastern seaboard. In 2000, Ahold put its multi-channel strategy into practice by acquiring U.S. Foodservice and its former sister company PYA/Monarch. Overall sales in 2000 from Aholds food retail and foodservice activities in the United States amounted to approximately USD 27.8 billion.
Ahold worldwide
Ahold currently operates approximately 8,600 supermarkets, hypermarkets and other store formats in the United States, Europe, Latin America and Asia. The company also has a significant presence in the foodservice sector and is developing a range of other products, including financial services and internet-based home delivery. Ahold employs approximately 420,000 people in 25 countries. Aholds website can be found at www.ahold.com. The information on the Ahold website is not incorporated by reference into this press release.
Brunos Supermarkets Inc. - Corporate Profile
Name: Brunos Supermarkets, Inc.
Head Office: Birmingham, Alabama
Number of stores: 184
Supermarkets: 169
Number of distribution centers: 1
Number of employees: Approximately 14,000
Management:
James Demme, President & CEO
Main geographic areas:
Alabama, Florida, Mississippi,
Georgia
Store Type:
Brunos Supermarkets: 30
Food World, Food Max: 120
Food Fair: 18
Pharmacy: 1
Gas stations: 2
Liquor stores: 13
Fiscal year February 1 - January 31, ending on the Saturday closest to January 31
Fiscal year 2000 Net Sales approximately USD 1.65 billion
Fiscal year 2000 EBITDA* approximately USD 60 million
Fiscal year 2000 EBIT* approximately USD 33 million
Fiscal year 2000 Depreciation & Amortization* approximately USD 26 million
Fiscal year 2000 Capital Expenditures approximately USD 44 million
* Numbers are combined for Brunos Supermarkets, Inc. and Brunos, Inc.
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Certain statements in this press release, including expectations as to completion of the acquisitions referred to herein and future performance, are forward-looking statements within the meaning of U.S. federal securities laws and are intended to be covered by the safe harbors created thereby. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from these statements. Such factors include, but are not limited to, the effect of general economic conditions and changes in interest rates in the countries in which the company operates, increased competition in the markets in which the company operates, changes in marketing methods utilized by competitors and difficulties encountered in the integration of new acquisitions. Fluctuation in exchange rates between the Euro and the other currencies in which the companys assets, liabilities and results are denominated, in particular the U.S. dollar, can also influence the forward-looking statements as can other factors discussed in the companys public filings. Readers are cautioned not to place undue reliance on such forward-looking statements. For a more detailed discussion of such risks and other factors, see Royal Aholds Annual Report on Form 20-F for its most recent fiscal year.
This press release does not constitute an offer to sell or a solicitation of an offer to buy shares of Ahold common shares or ADSs. An offer may only be made by means of a prospectus supplement and related prospectus. Investors should base their decision to subscribe to an equity offering purely on information provided in the prospectus supplement (and information incorporated by reference therein) and the related prospectus available no later than September 11, 2001 from Ahold corporate headquarters in Zaandam, The Netherlands. Outside the Netherlands the company presents itself under the name of Royal Ahold or simply Ahold. For reader convenience, Royal Ahold or Ahold are also used throughout the financial statements. The registered name of the company is Koninklijke Ahold N.V.
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Stabilisation / FSA.