Acquisition

6 Months Ended

Jun. 16, 2012

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Note 3 – Acquisition

          On April 3, 2012, U Save Foods, Inc., a Nash Finch wholly-owned subsidiary, completed an asset purchase from Bag ‘N Save Inc. of its twelve supermarkets which are located in Omaha and York, Nebraska (“Business”). The Company acquired the inventory, equipment and certain other assets of all locations and also acquired the real estate of six owned locations. The aggregate purchase price paid was $29.7 million in cash.

In accordance with the provisions of FASB Accounting Standards Codification (“ASC”) Topic 805, "Business Combinations" defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. ASC Topic 805 requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. ASC Topic 805 also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. 

The following table summarizes the fair values of the assets acquired and liabilities of the Business assumed at the acquisition date:

(in thousands)
Inventories	$	11,165
Property, plant and equipment		25,570
Other assets		630
Total identifiable assets acquired		37,365
Accrued expenses		1,026
Total liabilities assumed		1,026
Net assets acquired	$	36,339

          The fair value of the identifiable assets acquired and liabilities assumed of $36.3 million exceeded the purchase price of the Business of $29.7 million. Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that the valuation procedures and resulting measures were appropriate. As a result, the Company recognized a pre-tax gain of $6.6 million in the second quarter 2012 associated with the acquisition of the Business. The gain is included in the line item "Gain on acquisition of a business" in the Consolidated Statement of Income.

          The Company recognized $0.4 million of acquisition related costs that were expensed during the first and second quarter 2012 related to the acquisition of Bag ‘N Save and an additional $0.5 million of costs related to our purchase of certain assets and liabilities from NF Foods, LLC on June 25, 2012. These costs are included in the Consolidated Statement of Income under selling, general and administrative expenses.

           Sales of the Business included in the Consolidated Statement of Income from the acquisition date to the second quarter ended June 16, 2012 were $29.1 million.  This was offset by a corresponding $16.1 million decrease in Food Distribution segment sales due to the sales to that former Food Distribution customer now being reported in the Retail segment.  Although the Company made reasonable efforts to do so, synergies achieved through the integration of the Business into the Company's Retail segment, unallocated interest expense and the allocation of shared overhead specific to the Business cannot be precisely determined. Accordingly, the Company has deemed it impracticable to calculate the precise impact the Business will have on the Company's net earnings during fiscal 2012. However, please refer to "Note 12-Segment Reporting" of this Form 10-Q for a comparison of the Retail segment sales and profit for the second quarters of fiscal 2012 and 2011.