Grocery Outlet (GO), a retailer based in Emeryville, California, has agreed to acquire United Grocery Outlet (UGO), a discount grocery retailer operating in the southeastern US.
The acquisition, which includes 40 stores and a distribution centre, is set to enhance the GO footprint in six states including North Carolina, Tennessee and Georgia.
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Tennessee-based UGO is a close-out grocery retailer that has relationships with national and regional brands.
The acquisition is scheduled to close early in the second quarter of 2024.
The move is expected to be modestly accretive to GO’s 2024 earnings.
The company will reveal the financial impact of the acquisition during its fourth quarter and full fiscal year 2023 earnings call on 27 February 2024.
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By GlobalDataBofA Securities served as the exclusive financial advisor to Grocery Outlet, while Honigman and Gould & Ratner provided legal counsel.
Grocery Outlet president and chief executive officer RJ Sheedy said: “UGO is a natural fit given our similar opportunistic buying strategies, customer value propositions and shared mission of serving our communities.
“This acquisition provides GO with scale in a new region as well as a platform for future expansion in the southeast. We are excited to welcome the UGO team into the GO family, and we look forward to working together on the many growth opportunities ahead.”
Grocery Outlet also plans to open 15 to 20 new stores in its existing markets in 2024.
