DEFA14A: SpartanNash to be Acquired by C&S Wholesale Grocers in $26.90 Per Share All-Cash Deal

SpartanNash Company has entered into a definitive merger agreement to be acquired by C&S Wholesale Grocers, LLC for $26.90 per share in cash, with the transaction expected to close in the fourth quarter of 2025.

Summary

• SpartanNash Company has entered into an Agreement and Plan of Merger with New Mackinac HoldCo, Inc., Mackinac Merger Sub, Inc., and C&S Wholesale Grocers, LLC.
• Merger Sub will merge with and into SpartanNash, with SpartanNash surviving as a wholly-owned subsidiary of Parent.
• Each outstanding share of SpartanNash common stock will be converted into the right to receive $26.90 in cash, without interest.
• SpartanNash's Board of Directors unanimously determined the merger and related transactions are fair to and in the best interests of the Company and its shareholders, and resolved to recommend shareholder approval.
• Outstanding Company equity-based awards (Restricted Stock, RSU, and PSU awards) will vest (with performance-based awards vesting based on the greater of target and actual performance) and be converted into the right to receive cash equal to the Merger Consideration for each share subject to the award.
• The transaction is expected to close in the fourth quarter of 2025, subject to customary conditions including shareholder and regulatory approvals (HSR Act).
• The completion of the Merger is not subject to a financing condition.
• Upon consummation, SpartanNash's common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.
• If the Company terminates the agreement for a superior proposal or Parent terminates due to a Change of Recommendation, the Company will pay Parent a termination fee of $35,400,000.
• If the agreement is terminated due to expiration, failure to receive shareholder approval, or Company breach, and a Company Takeover Proposal is publicly made and subsequently consummated within 12 months, the Company will pay Parent a termination fee of $35,400,000.
• If the agreement is terminated due to failure to receive regulatory approvals under the HSR Act, Parent will pay the Company a termination fee of $55,000,000.
• If Parent fails to consummate the closing when all conditions are met and the Company is ready to close, Parent will pay the Company a termination fee of $50,000,000.

Sentiment

Score: 8

Explanation: The document announces a definitive merger agreement with unanimous board approval, an all-cash offer, and secured financing, indicating a high probability of successful completion and a positive outcome for shareholders. The risks mentioned are standard for such transactions and are being addressed through customary provisions.

Positives

• The Board of Directors unanimously approved the Merger Agreement, determining it to be fair and in the best interests of the Company and its shareholders.
• Shareholders will receive $26.90 per share in cash, providing immediate liquidity and certainty of value.
• The transaction is not subject to a financing condition, reducing execution risk.
• Parent has secured substantial equity financing of $903,000,000 from RJJRP Holdings, Inc. and debt financing commitments of up to $1,000,000,000, ensuring sufficient funds for the acquisition.
• C&S Wholesale Grocers, LLC (Guarantor) provides an irrevocable, absolute, and unconditional guaranty for Parent and Merger Sub's obligations under the agreement.
• Continuing employees will receive an annual base salary or wage rate and target short-term cash bonus/commission opportunities that are, in the aggregate, no less favorable than prior to closing for one year.
• Continuing employees will receive health, welfare, retirement, and fringe benefits that are no less favorable in the aggregate for one year.
• Severance benefits for continuing employees will be provided on terms and conditions consistent with existing plans, without reduction in compensation and accounting for prior service.
• Guarantor's employee benefit plans will recognize continuing employees' service for eligibility, vesting, and benefit accrual (with certain exceptions).
• Pre-existing condition limitations will be waived, and deductibles/co-payments will be credited for continuing employees under new health plans.
• Cash retention bonus awards will be paid to certain employees as specified.

Negatives

• SpartanNash Company will cease to be an independent publicly traded entity.
• The Company's common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.
• The Company is subject to customary non-solicitation restrictions during the interim period, limiting its ability to seek alternative acquisition proposals.
• The Company's business operations are subject to certain restrictions during the interim period, requiring Parent's consent for specified actions.
• The Company may be required to pay a termination fee of $35,400,000 to Parent under certain circumstances, such as a superior proposal or a change of recommendation.

Risks

• Failure to obtain the required vote of SpartanNash's shareholders in connection with the transaction.
• The transaction may not be completed at all or within the anticipated timetable.
• The occurrence of any event, change, or other circumstances that could give rise to the termination of the merger agreement, including circumstances requiring a party to pay a termination fee.
• The conditions to closing of the transaction may not be satisfied or waived.
• A governmental or regulatory approval that may be required for the transaction is not obtained or is obtained subject to conditions that are not anticipated.
• Potential litigation relating to, or other unexpected costs resulting from, the transaction.
• Legislative, regulatory, and economic developments could impact the transaction.
• The proposed transaction may disrupt SpartanNash's current plans and operations, including the continued payment of quarterly dividends.
• Certain restrictions during the pendency of the transaction may impact SpartanNash's ability to pursue certain business opportunities or strategic transactions.
• Diversion of management's time on transaction-related issues.
• Continued availability of capital and financing and rating agency actions.
• Any announcements relating to the transaction could have adverse effects on the market price of SpartanNash's common stock, credit ratings, or operating results.
• The transaction and its announcement could have an adverse effect on the ability to retain and hire key personnel, to retain customers, and to maintain relationships with business partners, suppliers, and customers.

Future Outlook

The transaction is expected to close in the fourth quarter of 2025, subject to the receipt of regulatory and shareholder approvals. Upon consummation of the merger, SpartanNash's common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.

Management Comments

• SpartanNash's Board of Directors has unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, and in the best interests of, the Company and its shareholders.
• The Board declared it advisable to enter into the Merger Agreement, approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, and resolved to recommend that the Company's shareholders approve the Merger Agreement.

Industry Context

This announcement details a significant merger within the U.S. grocery wholesale and retail industry, where SpartanNash operates. The acquisition by C&S Wholesale Grocers, a major player in the wholesale grocery sector, indicates a trend of consolidation aimed at enhancing market position and operational scale. This move could allow C&S to expand its retail footprint through SpartanNash's existing network and potentially achieve greater efficiencies in supply chain and distribution.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards, comparable companies, projects, or results. It focuses solely on the terms and conditions of the proposed merger between SpartanNash and C&S Wholesale Grocers.

Management Changes

Corporate Governance

Legal Proceedings

• The Company will provide prompt notice to Parent of any litigation brought by shareholders against the Company or its directors/officers relating to the Transactions.
• The Company will give Parent the opportunity to participate in the defense or settlement of such litigation, and no settlement or related disclosure will be agreed without Parent's prior written consent (not to be unreasonably withheld, conditioned, or delayed).
• As of the date of the agreement, there is no litigation pending or threatened against the Company or its Subsidiaries that would reasonably be expected to have a Company Material Adverse Effect.

Related Party Transactions

• Except for compensation or other employment arrangements entered into in the ordinary course of business, there are no Contracts or transactions between the Company or any of its Subsidiaries and any Affiliate (including any director or officer, but not including any wholly-owned Subsidiary of the Company) that would be required to be disclosed pursuant to Item 404 of Regulation S-K under the Exchange Act and which has not been so disclosed.

Stakeholder Impact

• **Shareholders**: Will receive $26.90 per share in cash for their common stock, providing immediate liquidity and a definitive return on investment. The Board unanimously recommends approval.
• **Employees**: Current employees (Continuing Employees) will receive comparable base salary/wage rates and short-term cash bonus/commission opportunities for one year post-closing. Health, welfare, retirement, and fringe benefits will be no less favorable in aggregate for one year. Severance benefits will be honored, and prior service will be recognized for certain benefit purposes. Equity-based awards will vest or convert to cash-based awards. Cash retention bonuses are also provided.
• **Customers, Suppliers, and Business Partners**: There is a risk that the transaction and its announcement could have an adverse effect on the ability to retain customers and to maintain relationships with business partners and suppliers.
• **Creditors**: The Existing Credit Facility will be paid off at or prior to closing. Parent has secured significant debt financing commitments to fund the transaction and repay existing indebtedness.

Next Steps

• SpartanNash will prepare and file a preliminary and definitive proxy statement with the SEC.
• SpartanNash will mail the definitive proxy statement and a proxy card to each shareholder entitled to vote.
• SpartanNash will call, give notice of, convene, and hold a meeting of its shareholders to obtain the Company Shareholder Approval.
• Parent, Guarantor, and the Company will make all required filings with appropriate Governmental Authorities under applicable Competition Laws (e.g., HSR Act) and respond to inquiries.
• Parent, Guarantor, and Merger Sub will negotiate definitive agreements for the Debt Financing.
• The Company will obtain and deliver a customary payoff letter for the Existing Credit Facility.
• The Company will cooperate with Parent regarding cash collateralization or termination of existing letters of credit.
• The Company will cause resignations executed by each director of the Company, effective upon the Effective Time.
• Parent, as the sole shareholder of Merger Sub, will execute and deliver a written consent approving the Merger.
• The Company will provide written notice to the Warrantholder regarding the qualifying Business Combination and effect the exercise of Company Warrants.

Key Dates

Recommendation

Keywords

SpartanNash, C&S Wholesale Grocers, Merger, Acquisition, Cash Deal, SEC Filing, DEFA14A, Shareholder Approval, Regulatory Approval, HSR Act, Equity Financing, Debt Financing, Corporate Governance, Risk Management, Food Distribution, Grocery Retail