MEGAFOODS STORES INC. TO ACQUIRE FURR'S SUPERMARKETS INC.
MESA, Ariz., March 31 /PRNewswire/ -- Megafoods Stores Inc. (NASDAQ: MEGF) and Furr's Supermarkets Inc. have signed a letter of intent pursuant to which Megafoods would acquire the stock of Furr's for approximately $74 million in cash plus a contingent payment based upon Furr's future earnings. Consummation of the acquisition is subject to due diligence, corporate and government approvals, the execution of definitive agreements and financing agreements. Following the satisfaction of these conditions, the merger is expected to close in early June 1993. Megafoods has retained PaineWebber Inc. as its financial adviser and has been engaged to arrange financing for transaction. Furr's operates a total of 79 stores operating under the names Furr's, Bag'n Save and Solo in West Texas and New Mexico. Furr's senior management team will continue to be led by Jan Friederich, chief executive officer. Dean Miller, chief executive officer of Megafoods, said that "the acquisition of Furr's is intended to allow the company to increase its critical mass and growth rate. The acquisition should result in a financially strong company which, on a combined basis, would have had revenues exceeding $1.1 billion during 1992." Fleming Companies Inc. provides distribution services for Megafoods in Arizona, Nevada and California, and for Furr's in New Mexico and Texas; Megafoods expects to continue these arrangements pursuant to existing supply agreements. Megafoods currently operates 23 super warehouse stores with 28 additional stores to be opened by December 1994, in its current marketing areas of Arizona, Nevada and Southern California. With the Furr's acquisition, Megafoods would immediately acquire nine additional warehouse stores and 70 conventional stores. It is anticipated that 10 additional warehouse stores will be built in the New Mexico and West Texas markets over the following two years. Together with the stores acquired from Furr's, by the year of 1994, Megafoods would be slated to operate 70 warehouse and 69 conventional stores. -0- 3/31/93 /CONTACT: Dean G. Miller, CEO of Megafoods, 619-431-7213/ (MEGF)
CO: Megafoods Stores Inc.; Furr's Supermarkets Inc. ST: Arizona IN: REA SU: TNM
KJ-LS -- LA036 -- 1787 03/31/93 21:13 EST
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|Date:||Mar 31, 1993|
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