Grocery Outlet to acquire United Grocery Outlet for $62M

Grocery Outlet Holding announced that it has agreed to acquire United Grocery Outlet, an extreme value, discount grocery retailer operating throughout the Southeastern United States, from affiliates of Gen Cap America, Inc. and current and former UGO management for approximately $62M in cash, subject to customary purchase price adjustments. The buyer expects to finance the transaction with available cash. With 40 stores and a distribution center, the acquisition of UGO will expand Grocery Outlet’s presence into Tennessee, North Carolina, Georgia, Alabama, Kentucky and Virginia. The acquisition is anticipated to close early in the second quarter, subject to customary closing conditions. In addition to the newly acquired UGO stores, Grocery Outlet plans to open 15 to 20 stores in existing markets in 2024, for a total of 55 to 60 net new stores this year. The acquisition is expected to be modestly accretive to the company’s 2024 earnings and will be discussed in more detail on the company’s fourth quarter and full fiscal year 2023 earnings call scheduled for Tuesday, February 27. RJ Sheedy, President and Chief Executive Officer of Grocery Outlet, stated, “United Grocery Outlet is a natural fit given our similar opportunistic buying strategies, customer value propositions, and shared mission of serving our communities. This acquisition provides Grocery Outlet with scale in a new region as well as a platform for future expansion in the Southeast. We are excited to welcome the United Grocery Outlet team into the GO family, and we look forward to working together on the many growth opportunities ahead.”