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KB US Holdings, Inc. – Files $96.4mn APA Executed with Affiliate of Cerberus Capital Management-Backed Albertsons Companies, Inc.; Sale Hearing Set for October 22nd


October 19, 2020 – The Debtors have filed an asset purchase agreement (“APA”) memorializing the terms of a proposed $96.4mn sale to Acme Markets, Inc., ("Acme" or the “Buyer”) [Docket No. 281]. The October 19th APA governing the terms of the sale is attached to the notice as Exhibit A and includes a blackline comparing the terms of the Buyer's APA with that of stalking horse bidder TLI Bedrock LLC ("TLI Bedrock"). 

Further to an October 13th Auction, on October 14th the Debtors designated the Buyer as the successful bidder and TLI Bedrock as the back-up bidder [Docket No. 266]. TLI Bedrock had paced bidding with a $75.0mn offer and is entitled to payment of a $2.63mn break-up fee and reimbursement expenses of up to $550k if the Debtors close on a sale to Acme or another party.

ACME is a division of Boise, Idaho based Albertsons Companies, Inc., (NYSE: ACI) which is the second-largest supermarket chain in North America and 32% owned by Cerberus Capital Management, L.P. As to the acquisition of the Debtors (which for the 2,300 store supermarket giant did not even trigger an 8-K filing requirement), the Buyer announced: "Upon the successful completion of the transaction, the stores will become part of the Mid-Atlantic division of Albertsons Companies, which operates ACME and Safeway stores on the east coast. The winning bid for the package and expected purchase price is $96.4 million."

Key Terms of the Asset Purchase Agreement:

  • Buyer: Acme Markets, Inc., a division of Albertsons Companies, Inc.
  • Seller: KB US Holdings, Inc.
  • Purchase Price: $96.4mn
  • Back-up Bidder: TLI Bedrock LLC ($75.0mn Stalking Horse Bid)
  • Bid Protections: (i) a break-up fee of $2.625mn (the “Termination Fee”), (ii) the reimbursement of reasonable and documented expenses up to $550k (the “Expense up to $550k (the “Expense Reimbursement”) and (iii) a minimum bid increment set at $500k.

About the Debtors

KB US Holdings Inc. is the parent company of King Food Markets and Balducci’s Food Lover’s Market.  

Kings Food Markets. For more than eighty years Kings has been rated one of the finest food stores to serve New Jersey, Long Island and Connecticut. Long before the national trend led other grocers to “local” and “organic,” Kings understood that their clientele, located in many of the finest towns in America, cared about freshness, sustainability, quality and the provenance of their food. From the freshest produce and cheeses, to the finest meats, poultry and fish, the in-store experience is enhanced by Kings’ associates who pride themselves on customer service. Kings is based in Parsippany, N.J., with twenty-five stores serving the region. 

Balducci’s Food Lover’s Market. What began in 1916 as a small vegetable pushcart in the heart of New York City, Balducci’s became, over its 104-year history, America’s leading gourmet specialty food shop. Offering the finest foods– cheeses and meats, fish, fresh produce and grocery items from the exotic to the most luxurious, Balducci’s prides itself on presenting not just the best brands from every corner of the globe, but a gold standard private label too. Balducci’s has an executive chef cooking in every market with catering available as well. Balducci’s markets are located in New York, Connecticut, Maryland, and Virginia. 

About Albertsons Companies

According to Albertsons: "Locally great and nationally strong, Albertsons Companies is a leading food and drug retailer in the United States. The company operates stores across 34 states and the District of Columbia under 20 well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs. The Company is committed to helping people across the country live better lives by making a meaningful difference, neighborhood by neighborhood. In 2019 alone, along with the Albertsons Companies Foundation, the Company gave $225 million in food and financial support. In 2020, the Company made a $53 million commitment to community hunger relief efforts and a $5 million commitment to organizations supporting social justice. These efforts have helped millions of people in the areas of hunger relief, education, cancer research and treatment, social justice, and programs for people with disabilities and veterans' outreach.

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The post KB US Holdings, Inc. – Files $96.4mn APA Executed with Affiliate of Cerberus Capital Management-Backed Albertsons Companies, Inc.; Sale Hearing Set for October 22nd appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.

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