Spartan to acquire VG's chain of Fenton
Spartan Stores Inc. announced today it plans to acquire Fenton-based VG’s Food Center’s 17 grocery stores and VG’s Pharmacy Inc.’s 15 pharmacies.
The deal would give Spartan its strongest retail presence east of Lansing, although it has many distribution customers and a warehouse in eastern Michigan. The publicly-held Spartan, based in Byron Center, has a purchase agreement to buy the 50-year-old chain from the Van Gilder family. VG’s is currently a distribution customer of Spartan.
Spartan said costs related to the transition, such as marketing, promotion and employee training will hold down the purchase’s effect on earnings per share during the first year of ownership. The company said it expects the acquisition will increase retail sales by $310 million and consolidated sales by $160 million.
“Achieving profitable growth through a combination of organic growth and prudent retain acquisitions is the essence of our business strategy,” Spartan Chairman Craig C. Sturken said in a statement issued by the company. “Our marketing, merchandising and category management expertise joined with VG’s profound understanding of the local markets provide excellent opportunities to enhance the customers’ shopping experience, produce operational synergies and raise shareholder value.”
The acquisition is expected to be complete at the end of the third quarter of fiscal 2009. No purchase price was given.
Spartan is the country’s 10th largest grocery distributor, with 400 independent grocery customers in Michigan, Indiana and Ohio. It has 84 retail supermarkets in Michigan and labels include D&W Fresh Markets, Family Fare, Felpausch Food Centers and Glen’s Markets.