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SpartanNash an appetizing target

Illustration of a dollar sign on a grocery store checkout conveyor belt.

Illustration: Megan Robinson/Axios

SpartanNash is attracting separate interest from rival United Natural Foods Inc. and PE firm Oak Street Real Estate Capital, Reuters reported.

  • Oak Street's interest is in the real estate, while United Natural Foods is exploring a bid for the whole company, the article said.

Why it's the BFD: Grocery M&A is emerging as a major theme in the second quarter of 2022 with Albertsons conducting a strategic review, which includes exploring a sale.

  • Plus PE firm Kingswood Capital recently acquired supermarket chain Save Mart, while Apollo Global Management picked up Tony's Fresh Market in late March.

Of note: Axios flagged United Natural Foods as a potential bidder for SpartanNash's military food distribution business.

Between the lines: Activist investors Macellum and Ancora nominated three candidates to SpartanNash's board in March, according to an announcement.

  • They want the grocery business to weigh a developed three-year plan against its strategic options, such as a sale of either the parts or the whole.

Details: Oak Street Real Estate is owned by Blue Owl, which counts direct lender Owl Rock as one of its business units.

Reality check: "The food distribution segment could prove to be a meaningful combination, but SpartanNash also has a sizable retail business the company might not want," said BTIG analysts Peter Saleh and Ben Parente in a report.

  • They went on to point out that the military segment is losing money and in need of a turnaround.
  • United Natural Foods would need to increase its debt leverage from 3x EBITDA to about 4.2x to acquire SpartanNash.
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