Acquisition - No Frills (Acquisition – No Frills[Member])

9 Months Ended

Oct. 06, 2012

Acquisition – No Frills[Member]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Note 3 – Acquisition – No Frills

 On June 25, 2012, U Save Foods, Inc., a Nash Finch wholly-owned subsidiary, completed an asset purchase from NF Foods, LLC (“No Frills”) of its eighteen supermarkets, which are located in Nebraska and western Iowa.  The Company acquired the inventory, accounts receivable, equipment and certain other assets of all locations, while assuming obligations for accounts payable and certain other liabilities. The aggregate purchase price paid was $49.3 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 No Frills assumed at the acquisition date:

(in thousands)
Cash and cash equivalents	$	441
Accounts receivable		1,893
Inventories		14,771
Prepaid expenses		209
Property, plant and equipment		8,981
Tradename		2,900
Leasehold interest		3,540
Other assets		327
Total identifiable assets acquired		33,062
Accounts payable		3,910
Accrued expenses		1,260
Other long-term liabilities		1,479
Total liabilities assumed		6,649
Net assets acquired	$	26,413

          The purchase price of No Frills of $49.3 million exceeded the fair value of the identifiable assets acquired and liabilities assumed of $26.4 million.  As a result, the Company recognized goodwill of $22.9 million in the third quarter 2012 associated with the acquisition of No Frills.  Included in the amounts shown in the table above were $0.5 million in accounts receivable that were due to No Frills from the Company and $2.3 million in accounts payable that were due to the Company from No Frills.  The stated values of the acquired assets and liabilities are preliminary and subject to potential adjustments during our next fiscal quarter.

          The Company recognized $0.6 million of acquisition related costs that were expensed during year-to-date 2012 related to our purchase of certain assets and liabilities from No Frills. These costs are included in the Consolidated Statement of Income under selling, general and administrative expenses.

           The sales of No Frills are included in the Consolidated Statement of Income from the acquisition date to the third quarter ended October 6, 2012 and were $62.0 million.  This was offset by a corresponding $33.4 million decrease in Food Distribution segment sales since No Frills was formerly a Food Distribution customer and these sales are now being reported in the Retail segment.  Although the Company has made reasonable efforts to do so, synergies achieved through the integration of No Frills into the Company's Retail segment, unallocated interest expense and the allocation of shared overhead specific to No Frills cannot be precisely determined. Accordingly, the Company has deemed it impracticable to calculate the precise impact that the acquisition of No Frills will have on the Company's net earnings during fiscal 2012. However, please refer to "Note 13-Segment Reporting" of this Form 10-Q for a comparison of the Retail segment sales and profit for the third quarters of fiscal 2012 and 2011.