Total Logistics (NASDAQ:TLCX)
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SUPERVALU Announces Agreement to Acquire Total Logistics, Inc.
Acquisition Provides SUPERVALU Critical Mass In Third-Party Logistics
MINNEAPOLIS, Jan. 4 /PRNewswire-FirstCall/ -- SUPERVALU INC. (NYSE:SVU)
announced today that it has signed an agreement and plan of merger with Total
Logistics, Inc. (NASDAQ:TLCX), an industry-leading national provider of
integrated third-party logistic services with calendar 2004 nine-month revenues
of $253 million. Under the terms of the agreement, which was unanimously
approved by both companies' boards of directors, SUPERVALU will pay $28.50 in
cash for each Total Logistics, Inc. share and will assume Total Logistics, Inc.
outstanding debt, which is estimated to total approximately $68 million at
closing. With approximately 5.7 million fully diluted Total Logistics, Inc.
shares outstanding, the aggregate transaction value is approximately $233
million, including assumed debt and transaction expenses. The acquisition,
which is subject to certain conditions, is anticipated to close within 45 days.
SUPERVALU expects the acquisition to be slightly accretive to fiscal year 2006.
Jeff Noddle, chairman and CEO of SUPERVALU, stated: "We have been looking for
the right partner to obtain critical mass and solidify our commitment to
third-party logistics and we have found the perfect fit in Total Logistics,
Inc. This company has an impressive position in third-party logistics with its
proven management team, a blue-chip customer base and a full suite of
integrated service solutions. The combination of SUPERVALU's scale and supply
chain competence together with Total Logistics, Inc. and its nationally
recognized reputation in third-party logistics will unlock new growth
opportunities."
William T. Donovan, president and CEO of Total Logistics, Inc., said: "We are
proud that we have built Total Logistics, Inc. into a recognized company with
national reach, and we believe the best path to future growth is to team with
SUPERVALU whose size and resources can maximize the potential of the
third-party logistics opportunity."
For the nine months ended Sept. 30, 2004, Total Logistics, Inc. reported
revenues of $253.3 million, up 25 percent. EBITDA for the nine months was $15.6
million, or 6.2 percent of revenues, up 24 percent. Total Logistics, Inc. is a
Milwaukee-based holding company; its two wholly owned subsidiaries, Total
Logistic Control (TLC) and Zero Zone, employ about 3,000 people.
TLC contributes the majority of the company's revenues by offering a broad
service suite including warehouse management, transportation, procurement,
contract manufacturing and logistics engineering and management services. TLC's
customers consist of local, regional, national, and international firms engaged
in food and beverage manufacturing, consumer and industrial product
manufacturing, wholesale distribution and retailing. Within the last 12 months,
TLC has secured a number of new logistics contracts, including agreements with
Kraft Foods, Sara Lee and Kellogg's. TLC manages more than 30 facilities around
the country providing end-to-end supply chain solutions to customers. Zero Zone
is a successful niche manufacturer of refrigerated and frozen display cases
serving the grocery, convenience, dollar and drug store chains. In addition,
the company produces refrigeration systems and racks to power and control the
refrigeration systems, electrical panels and stand-by power for both retail and
industrial applications. Zero Zone is known as a pioneer for innovations like
improved case lighting and energy efficiency.
Noddle added, "TLC, with its premier status in the third-party logistics
industry, gives SUPERVALU an infrastructure and platform from which to realize
the exciting growth potential. We're also delighted by the prospect of serving
Total Logistics, Inc.'s roster of world-class customers."
The transaction will be structured as a tender offer for Total Logistics, Inc.
shares. In accordance with the terms of the agreement, not later than January
11, 2005, a wholly owned subsidiary of SUPERVALU will offer to acquire all of
the outstanding shares of Total Logistics, Inc. common stock at $28.50 per
share in cash. The tender offer will be subject to at least 75 percent of the
outstanding Total Logistics, Inc. shares, on a fully diluted basis, being
validly tendered and not withdrawn. The Total Logistics, Inc. board of
directors today unanimously approved the offer and recommended shareholder
acceptance. The board members control approximately 70 percent of the
outstanding shares on a fully diluted basis. The tender offer will be subject
to regulatory approvals and other customary conditions. Following the close of
the tender, any shares not tendered will be acquired at $28.50 per share in
cash in a subsequent merger. Lazard acted as financial advisor to SUPERVALU
and will serve as the dealer manager on the tender offer. William Blair & Co.
served as financial advisor to Total Logistics, Inc.
About Total Logistics, Inc.
Total Logistics, Inc. is a Milwaukee-based public company operating through two
wholly owned businesses, Total Logistic Control and Zero Zone. Additional
corporate data can be found at http://www.totallogisticsinc.com/ .
Total Logistic Control (TLC), based in Zeeland, Michigan, is a national
provider of integrated logistics services which include refrigerated and dry
warehousing, transportation operations, supply chain management, dedicated
third-party facility and operations management, food distribution, bottling and
packaging and fulfillment services. TLC provides end-to-end supply chain
services to a number of major U.S. food and consumer product companies.
Operations are conducted through a national network of more than 30 logistic
centers with 57.2 million cubic feet of refrigerated capacity and over 3.2
million square feet of dry warehouse space, making it the tenth-largest
provider of refrigerated warehousing services in the United States. TLC
operates a fleet of 435 tractors with 825 refrigerated and dry trailers with
five maintenance facilities. TLC was recently cited by Inbound Logistics as a
Top 10 Provider of Third Party Logistics Excellence for the seventh year in a
row. More information about TLC is available at http://www.totallogistic.com/ .
Zero Zone, headquartered in North Prairie, Wisconsin, is a manufacturer of high
quality refrigerated and freezer display cases used in grocery, convenience,
dollar and drug store chains for retail merchandising of food, beverage and
floral products as well as refrigeration houses and racks to power and control
the refrigeration systems, electrical panels, and stand-by power for both
retail and industrial applications. More information about Zero Zone is
available at http://www.zero-zone.com/ .
About SUPERVALU INC.
Celebrating its 135th year of fresh thinking, SUPERVALU INC., a Fortune 100
company, is one of the largest companies in the United States grocery channel.
With annual revenues of approximately $20 billion, SUPERVALU holds leading
market share positions across the U.S. with its more than 1,500 retail grocery
locations, including licensed Save-A-Lot locations. With its Save-A- Lot
format, the company holds the number one market position in the extreme value
grocery retail sector. Through SUPERVALU's geographically diverse distribution
network, the company provides distribution and related logistics support
services to nearly 4,500 grocery retailers across the nation. In addition,
SUPERVALU's third-party logistics business provides end-to-end supply chain
management solutions that deliver value for manufacturers, consumer products
retailers and food service customers. SUPERVALU currently has more than 55,000
employees. For more information about SUPERVALU visit
http://www.supervalu.com/ .
Webcast Information
There will be a webcast and conference call to discuss this announcement at
9:00 a.m. Central time tomorrow, Wednesday, January 5. A live webcast of the
conference call will be available at http://www.supervalu.com/ . Interested
parties should dial 1-888-862-6557 at least five minutes prior to the call. An
archive of the call is accessible via telephone by dialing 1-630-652-3041 with
pass code 10664731# and through the Web site at http://www.supervalu.com/ . The
conference call archive will be available for two weeks.
Statements made in this release concerning the Company's or management's
intentions, expectations, or predictions about future results or events are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements reflect management's current
expectations or beliefs, and are subject to risks and uncertainties that could
cause actual results or events to vary from stated expectations, which
variations could be material and adverse. Factors that could produce such a
variation include, but are not limited to, the following: the possible
inability to complete the Total Logistics, Inc., acquisition; the risks and
uncertainties associated with successfully integrating the two companies; the
ability to retain key personnel; the inherent unreliability of earnings,
revenue and cash flow predictions due to numerous factors, many of which are
beyond the Company's control; developments in the demand for each companies'
products and services; relationships with major customers and suppliers;
unanticipated delays, costs and expenses inherent in the development and
marketing of new products and services; the impact of governmental laws and
regulations; and competitive factors. Our forward-looking statements speak
only as of the time made, and we assume no obligation to publicly update any
such statements. Additional information concerning these and other factors
that could cause actual results and events to differ materially from the
Company's current expectations are contained in the Company\'s Form 10-Q for the
period ending September 11, 2004.
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell shares of Total Logistics, Inc. SUPERVALU will be filing a
tender offer statement with the Securities and Exchange Commission (SEC) and
Total Logistics, Inc. will be filing a solicitation/recommendation statement
with respect to the offer. Total Logistics, Inc. shareholders are advised to
read the tender offer statement regarding the acquisition of Total Logistics,
Inc. referenced in this news release, and the related
solicitation/recommendation statement when those statements are made available
to them. The tender offer statement and the solicitation/recommendation
statement will contain important information, which should be read carefully
before any decision is made with respect to the offer. These documents will be
made available to all shareholders of Total Logistics, Inc. at no expense to
them. These documents will also be available at no charge on the SEC's web
site at http://www.sec.gov/. Stockholders may also obtain copies of these
documents without charge by requesting them from Total Logistics, Inc. in
writing at 700 N. Water St., Suite 1200, Milwaukee, WI 53202, or by phone at
(414) 291-9000.
DATASOURCE: SUPERVALU INC.
CONTACT: Media, Lynne High, +1-952-828-4515, ,
or Investors, Yolanda Scharton, +1-952-828-4540,
, both of SUPERVALU INC.
Web site: http://www.totallogistic.com/
http://www.zero-zone.com/
http://www.supervalu.com/