By Lisa Kerner
Charlotte, N.C., Feb. 21 - Whole Foods Market, Inc. entered into a definitive agreement to acquire Wild Oats Markets, Inc. in a cash tender offer of $18.50 per share, or approximately $565 million.
Whole Foods Market will also assume Wild Oats Markets' $106 million of existing net debt.
The transaction, expected to close in April, will be funded with $700 million of senior term loans, according to a company news release. Whole Foods Market also intends to upsize its long-term senior revolving credit facility to $250 million as part of the transaction.
The 30-day tender offer is slated to begin on Feb. 27 and is conditioned upon at least a majority of Wild Oats Markets' outstanding shares being tendered.
Wild Oats Markets' board of directors has unanimously recommended that its stockholders tender their shares in the offer. The Yucaipa Cos., Wild Oats Markets' largest shareholder with approximately 18% ownership, has committed to tendering its shares.
"Our companies have similar missions and core values, and we believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members," Whole Foods Market co-founder John Mackey said in the release.
"As the natural and organic foods industry continues to receive attention from larger conventional players, the timing for our two companies to join forces could not be better," Wild Oats Markets chief executive officer Gregory Mays added.
Whole Foods Market is an Austin, Texas-based natural and organic foods retailer.
Wild Oats Markets is a nationwide chain of natural and organic food markets based in Boulder, Colo.
| Acquirer: | Whole Foods Market, Inc.
|
| Target: | Wild Oats Markets, Inc.
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| Transaction value: | $565 million
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| Payment per share: | $18.50
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| Announcement date: | Feb. 21
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| Expected closing: | April
|
| Stock price for target: | Nasdaq: OATS; $15.78 on Feb. 20
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