Albertsons 2007 Annual Report Download - page 85

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
stores
g
ive the Compan
y
a stron
g
market presence in man
y
ke
y
urban markets with little overlap with th
e
C
ompany’s legacy business
.
T
he Compan
y
purchased the Acquired Operations usin
g
a combination of stock, debt assumption and cash
compr
i
se
d
o
f:
Acqu
i
s
i
t
i
on o
f
approx
i
mate
l
y 372 s
h
ares o
f
outstan
di
ng A
lb
ertsons common stoc
k:
I
n
cash
$
7,572
I
n exchan
g
e for approximatel
y
68.
5
shares of SUPERVALU common stock 2,2
5
1
D
ebt assu
m
ed
6
,123
C
as
h
sett
l
ement o
f
restr
i
cte
d
stoc
k
un
i
tan
d
stoc
k
opt
i
on awar
d
s 143
R
estr
i
cte
d
stoc
k
un
i
tan
d
stoc
k
opt
i
on awar
d
s assume
d
143
Direct costs of the ac
q
uisition
4
9
T
otal
p
urchase
p
rice $16,281
Th
esa
l
eo
f
t
h
e Stan
d
a
l
one Drug Bus
i
ness to CVS an
d
t
h
esa
l
eo
f
t
h
e Non-Core Bus
i
ness to t
h
e Cer
b
erus Grou
p
g
enerated
$
4,911 in cash that was combined with the Company’s relative portion of the purchase price o
f
a
pproximatel
y
$11,400 in cash and equit
y
to complete the Albertsons acquisition.
Acquisition of New Albertsons Common Stoc
k
Pursuant to the Acquisition agreement, each share of New Albertsons common stock was acquired for
$
20.35 in
cas
h
an
d
0.182 s
h
ares o
f
SUPERVALU common stoc
k
(t
h
e “Acqu
i
s
i
t
i
on Cons
id
erat
i
on”). T
h
e cas
h
port
i
on o
f
the Acquisition Consideration was funded usin
g
$556 of cash on hand, $135 of the Acquired Operations’ cash on
h
and,
$
1,970 of debt financing provided by new credit facilities (see Note 9—Debt), and the cash proceeds o
f
$
4,911 from the simultaneous sale of the Standalone Drug and the Non-Core Businesses historically operated by
Albertsons. The fair value of SUPERVALU common stock issued was $32.73
p
er share, which re
p
resented the
a
verage c
l
os
i
ng pr
i
ce o
f
t
h
e Company’s common stoc
kb
eg
i
nn
i
ng two
d
ays
b
e
f
ore an
d
en
di
ng two
d
ays a
f
ter t
h
e
J
anuary 23, 200
6
announcement date of the Acquisition
.
Transition Services
A
greement
I
n connection with the purchase of Albertsons LLC b
y
the Cerberus Group, the Compan
y
entered into
a
trans
i
t
i
on serv
i
ces agreement (t
h
e “TSA”). T
h
e TSA prov
id
es
f
or a two-year term an
dfi
xe
d
payments to t
he
C
ompany of
$
155 in the aggregate in the first year and
$
135 in the aggregate in the second year and, in addition,
quarterl
y
variable pa
y
ments of $8.75 for a total of $35 of variable pa
y
ments per
y
ear. Durin
g
the second quarte
r
of fi
sca
l
2007 t
h
e
fi
xe
d
payments prov
id
e
df
or un
d
er t
h
e TSA were mo
difi
e
d
to re
fl
ect t
h
e trans
f
er o
f
certa
i
n
personne
lf
rom t
h
e Company to A
lb
ertsons LLC. T
h
e trans
f
er o
f
personne
l
resu
l
te
di
nare
d
uct
i
on
i
n Company
-
incurred expense and TSA fixed pa
y
ments of approximatel
y
$10.6 in
y
ear one and $10.6 in
y
ear two. After the
initial quarter of the TSA, the quarterly variable payments may be reduced by
$
0.4375 for each increment of 3
5
stores t
h
at w
ill
no
l
on
g
er
b
e supporte
d
un
d
er t
h
e terms o
f
t
h
ea
g
reement. Base
d
on stores t
h
at are c
l
ose
d
as o
f
Februar
y
24, 2007, the future quarterl
y
variable pa
y
ment amount is $7.4. Albertsons LLC is required to provid
e
the Company with 60 days advance notice of stores that will no longer be supported under the TSA, during
w
hi
c
h
t
i
me t
h
e Compan
yi
nten
d
store
d
uce t
h
e support
i
n
f
rastructure an
d
re
l
ate
d
costs. T
h
e TSA
f
ees are
included in Sellin
g
and administrative expenses in the Consolidated Statement of Earnin
g
s for fiscal 2007
.
F-
19