Nash Finch Agrees to Buy Two Roundy's Distribution Centers

Nash Finch Agrees to Buy Two Roundy's Distribution Centers

    Business Editors

    MINNEAPOLIS--(BUSINESS WIRE)--Feb. 24, 2005--

Represents Approximately $1.0 Billion in Annual Food Distribution Sales; Additions Advance Company's Strategic Plan;

No Facility Closures Anticipated

    Nash Finch Company (Nasdaq:NAFC) announced today that it has signed an agreement with Roundy's, Inc. to acquire the net assets, including customer contracts, of its wholesale food distribution divisions in Westville, Indiana, and Lima, Ohio, and two retail stores in Ironton and Van Wert, Ohio, for approximately $225 million.
    The Westville and Lima Divisions to be acquired represent approximately $1.0 billion in annual food distribution sales, servicing over five hundred customers, principally in Indiana, Illinois, Ohio and Michigan. The distribution centers to be acquired fit well with the Company's existing network and no facility closures are anticipated. The strategically located distribution centers will allow the Company to expand merchandising programs in a variety of areas, including the distribution of produce and meat, general merchandise, and health and beauty care. The Company expects that the acquisition will result in productivity improvements and buying efficiencies, which will be realized over several years. Specific examples of productivity improvements include the better balancing of transportation across the Company's distribution network to reduce miles and equipment, enhanced warehouse capacity utilization, and the reduction of outside storage space. The Company expects that the acquisition will be immediately accretive to earnings. Specifically, depending on the timing and nature of its integration process, the Company believes that as a result of the acquisition operating earnings will improve by approximately $31 to $33 million, net of implementation costs of approximately $3 million, during the twelve months following closing of the transaction. The impact on earnings per share will depend upon the nature and cost of the related financing, as well as the purchase accounting allocations and related amortization.
    Ron Marshall, Chief Executive Officer of Nash Finch, commented on the acquisition, "We have long admired the outstanding customers and dedicated associates of these divisions and are excited for them to join our organization. Those customers have our commitment that they will experience the same levels of outstanding customer service that all Nash Finch customers enjoy today. Customers of both Nash Finch and these Divisions will benefit from our ability to buy product much more efficiently as a combined organization, improving their ability to win in an increasingly competitive market. Most importantly, however, this acquisition continues to underscore our strategic commitment to the independent grocery retailing community."
    The closing of the transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and financing. The Company intends to finance the acquisition with borrowings under its existing bank facility and a debt or convertible debt financing.
    A conference call to review fourth quarter results and discuss the acquisition is scheduled for 10 a.m. (CT) on March 3, 2005. Interested participants can listen to the conference call over the Internet by logging onto the "Investor Relations" portion of Nash Finch's website at http://www.nashfinch.com. A replay of the web cast will be available and the transcript of the call will be archived on the "Investor Relations" portion of Nash Finch's website under the heading "Audio Archives." A copy of this press release and the other financial and statistical information about the periods to be discussed in the conference call will be available at the time of the call on the "Investor Relations" portion of the Nash Finch website under the caption "Press Releases."
    Nash Finch Company is a Fortune 500 company and one of the leading food distribution companies in the United States with nearly $4 billion in revenues. Nash Finch's food distribution business serves independent retailers and military commissaries in 27 states, the District of Columbia, Europe, Cuba, Puerto Rico, Iceland, the Azores and Honduras. The Company also owns and operates retail stores primarily in the Upper Midwest. Further information is available on the Company's website at www.nashfinch.com.
    The statements in this release that refer to anticipated financial results, improvements, plans and developments are forward-looking statements based on current expectations and assumptions, and entail risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Important factors that could cause material differences include the Company's ability to conclude the acquisition of the two distribution centers within the expected time frame and on favorable financing terms; the Company's ability to successfully integrate into its business the distribution centers to be acquired; the effect of competition on the Company's distribution and retail businesses; general economic conditions; credit risk from financial accommodations extended to customers; changes in consumer spending and buying patterns; limitations on financial and operating flexibility due to debt levels and debt instrument covenants; and other cautionary factors discussed in the Company's periodic reports filed with the SEC. The Company does not undertake to update forward-looking statements to reflect future events or circumstances, but investors are advised to consult future disclosures involving these topics in our periodic reports filed with the SEC.

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CONTACT: Nash Finch Company, Minneapolis LeAnne Stewart, 952-844-1060

KEYWORD: INDIANA ILLINOIS OHIO MINNESOTA MICHIGAN INDUSTRY KEYWORD: SUPERMARKETS FOODS/BEVERAGES CONSUMER/HOUSEHOLD RETAIL CONFERENCE CALLS MERGERS/ACQ SOURCE: Nash Finch Company

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