ROBESONIA, Pa. -- Associated Wholesalers Inc. (AWI), a regional cooperative food distributor for convenience stores and supermarkets, has entered into an asset purchase agreement with C&S Wholesale Grocers (C&S) pursuant to which C&S will acquire substantially all of AWI's assets, including its White Rose distribution business. Under terms of the APA, C&S will serve as the "stalking-horse bidder" in a court-supervised auction process.
The asset purchase agreement is subject to higher and otherwise better offers, among other conditions.
To facilitate the transaction process, AWI and its subsidiaries, including White Rose, have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company is action is expected to provide for an orderly sale of the AWI businesses under Section 363 of the Bankruptcy Code.
AWI and White Rose expect to continue operating in the normal course during the sale process.
"We believe that the asset purchase agreement with C&S is in the best interest of AWI and its stakeholders," said Joyce Fasula, chairman of the AWI. "After conducting a thorough process, which included the exploration of a range of alternatives and reaching out to multiple interested parties, we determined the best course of action for AWI was to enter this agreement with C&S and to undertake the court-supervised sale process."
"The addition of AWI and White Rose would expand C&S's footprint and enhance our significant capabilities in servicing independent grocers," said Rick Cohen, Chairman and CEO of C&S. "AWI and White Rose have a terrific customer base, and their distribution capabilities are a natural complement to our existing portfolio. We believe we are strongly positioned to provide all of their customers with the goods and services they need to successfully run and even grow their businesses."
In conjunction with the proposed transaction, AWI has received a commitment for debtor-in-possession financing to support its continued operations during the pendency of the sale process. C&S has also made a commitment to participate in the debtor-in-possession financing package. AWI has filed a number of customary motions seeking court authorization to continue to support its business operations during the transaction process, including the continued payment of employee wages, salaries and health benefits without interruption. AWI has also asked for authority to continue existing customer programs and intends to pay suppliers in full under normal terms for goods and services provided after the filing date of Sept. 9, 2014.
The proposed transaction is subject to higher and otherwise better offers to purchase any or substantially all of AWI's assets, court approval, antitrust approval, any other approvals required by law and other customary conditions. There can be no assurance that the proposed transaction will be consummated, the companies said.
Robesonia, Pa.-based AWI is a cooperative food distributor serving convenience stores, supermarkets and superettes with grocery, dairy, meat, produce, general merchandise and frozen food products.
C&S, based in Keene, N.H., is a major wholesale grocery supply company, supplying independent supermarkets, chain stores, military bases, and other customers with more than 150,000 different products. It serves about 5,000 stores from more than 50 locations across the country. C&S services many large chains, including Stop & Shop, Giant of Carlisle, Giant of Landover, BI-LO/Winn-Dixie, Great Atlantic & Pacific Tea Co. (A&P), Safeway and Target.
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