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Morgan Lewis, Skadden Cook Up $1.3 Billion Grocery Deal, Am Law Daily

July 22, 2013

Reprinted with permission from the July 22, 2013 edition of The Am Law Daily© 2013 ALM media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 or reprints@alm.com or visit www.almreprints.com.

Detroit's mega-municipal bankruptcy filing isn't the only matter out of Michigan providing work for Am Law 100 firms.

With the grocery M&A market heating up this summer, Skadden, Arps, Slate, Meagher and Flom and a top Wolverine State firm are advising Grand Rapids-based Spartan Stores, the nation's ninth-largest wholesale and retail food distributor, on its proposed $1.3 billion acquisition of rival Nash Finch.

The all-stock deal, which was announced Monday and calls for Spartan Stores to assume roughly $380 million in Nash Finch debt, will give Spartan control of the 75 Midwest stores that Minneapolis-based Nash Finch operates under the Bag'n Save, EconoFoods, Family Fresh Markets, Family Thrift Center, and Sun Mart Foods brands.  

Chicago-based Peter Krupp-one of a trio of global coheads of Skadden's corporate dealmaking practice-and partner Richard Witzel Jr. are serving as M&A counsel to the board of directors for Spartan, whose existing brands include D&W Fresh Markets, Family Fare Supermarkets, and Glen's Markets. Krupp did not immediately return a request for comment.

Charlie Goode, vice-chair of the business and corporate services practice group at Warner Norcross & Judd, is leading a team from the Grand Rapids-based firm representing longtime client Spartan. The other Warner Norcross lawyers working on the matter are corporate partners Gordon Lewis and Mark Wassink, and associates Emily Bakeman and Corinne Sprague.

Alex DeYonker, a former managing partner of Warner Norcross, serves as Spartan's general counsel. Warner Norcross is one of several firms advising clients in connection with Detroit's Chapter 9 proceedings, according to our previous reports.

Morgan, Lewis & Bockius partner David Pollak, who heads the firm's New York business and finance practice, is leading a team from the firm representing Nash Finch. Pollak and Morgan Lewis advised Nash Finch last year on its $29.9 million purchase of Omaha-based Bag'N Save. Pollak did not immediately return a request for comment on the Spartan deal.  

Other Morgan Lewis lawyers providing counsel to Nash Finch on its planned sale to Spartan include business and finance partners Jonathan Morris and Patricia Brennan, employee benefits partner Gary Rothstein, antitrust partner Harry Robins, tax partner Kenneth Kail, and associates James Fang, Andrew Milano, Stephen Nesspor, Eric Sarabia, Matthew Schernecke, and Dana Smith.  

Kathleen Mahoney, a former partner at Minnesota firms Oppenheimer, Wolf & Donnelly and Larson King, was hired in May 2011 as general counsel of Nash Finch. The company reportedly derives about half of its sales from food it distributes to 175 military commissaries and exchanges in the United States and abroad.  

Under the terms of the deal, Nash Finch shareholders will own 42.3 percent of the combined company, whose name has yet to be determined. Spartan shareholders, meanwhile, will own 57.7 percent of the newly merged entity, which expects to earn $7.5 billion in annual sales from its 177 retail stores and 22 food distribution centers in 37 states.  

The transaction, which is expected to close before year's end pending shareholder and regulatory approvals, is the latest major deal in the supermarket sector.  

In recent weeks, The Am Law Daily has reported on the firms grabbing key roles on the $11.9 billion merger between The Loblaw Companies and Shoppers Drug Mart; Safeway's $5.7 billion sale of its Canadian unit to Sobeys; and The Kroger Company's $2.5 billion acquisition of Harris Teeter Supermarkets.