Acquisition - Bag 'N Save (Acquisition - Bag 'N Save [Member])

9 Months Ended

Oct. 06, 2012

Acquisition - Bag 'N Save [Member]

Bag N Save Acquisition Disclosure [Text Block]

Note 4 – Acquisition – Bag ‘N Save

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 (“BNS”). The Company acquired the inventory, equipment and certain other assets of all locations and also acquired the real estate associated with six of these locations. The aggregate purchase price paid was $29.7 million in cash.         

In accordance with ASC Topic 805, the Company was required to recognize the fair value of the assets acquired and liabilities of BNS assumed.  The following table summarizes such fair values 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 BNS 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 BNS. The gain is included in the line item "Gain on acquisition of a business" in the Consolidated Statement of Income.

          The Company recognized $0.5 million of acquisition related costs that were expensed during year-to-date 2012 related to the acquisition of BNS. These costs are included in the Consolidated Statement of Income under selling, general and administrative expenses.

           The sales of BNS are included in the Consolidated Statement of Income from the acquisition date through the third quarter ended October 6, 2012.  These sales totaled $42.3 million during the third quarter of 2012 and $71.4 million for the entire post-acquisition period.  This was offset by a corresponding $23.7 million decrease in Food Distribution segment sales during the third quarter of 2012 and a $39.8 million decrease for the entire post-acquisition period since BNS 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 BNS into the Company's Retail segment, unallocated interest expense and the allocation of shared overhead specific to BNS cannot be precisely determined. Accordingly, the Company has deemed it impracticable to calculate the precise impact that the acquisition of BNS 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.