Empire Company Limited plans to acquire 51 per cent of Longo's and Grocery Gateway for $357 million based on an enterprise value of $700 million.
In addition to taking a majority stake in the company, the agreement includes options that could see Empire eventually take full control of the business.
The transaction will expand Empire’s e-commerce offerings and for now Empire says Voilà and Grocery Gateway will focus on operating independently to capture market share, with Empire stating it’s committed to growing Grocery Gateway.
"Empire has strong momentum and we are laser-focused on our Project Horizon growth plans in key markets like the GTA, both in bricks and mortar and e-commerce," says Michael Medline, President and CEO, Empire. "Longo's has built one of the most successful and sought-after brands in the GTA and Southwestern Ontario. Longo's is a crown jewel of grocery and as a values-driven company, Longo's culture aligns closely with Empire. We couldn't be happier to be partnering with Anthony and the Longo's team."
Empire's success with the Farm Boy acquisition has set a strong foundation to welcome the Longo's and Grocery Gateway businesses into its family of banners. The Company will continue to grow the Longo's and Grocery Gateway businesses while unlocking benefits through non-customer facing synergies. Longo's and Grocery Gateway customers will see no changes to their experience. Longo's plans to open several new stores over the next five years.
"With strong alignment to our family values and purpose, we look forward to working together with Empire to bring the Longo's experience to even more Canadian families," says Anthony Longo, president and CEO, Longo's. "The more we learned about Empire, the clearer it became that this was the right team to partner with to support our next chapter of growth. And of course, we will continue to offer the same high-quality service and fresh products, exceptional private-label offering and the convenience of e-commerce that our guests have come to know and love."
Grocery Gateway, which currently serves 70,000 loyal customers, will continue as a stand-alone business. Empire will continue to invest in the growth of Grocery Gateway's customer base, while seeking efficiencies through collaboration with Empire's fast growing Voilà online business.
Longo's will continue to be led by president and CEO, Anthony Longo, and his team of food retail executives. Although managed separately, Longo's says it will benefit from Empire's infrastructure and capabilities, in areas such as sourcing, logistics and real estate. The Longo's commitment to community and philanthropy through the Longo's Family Charitable Foundation will continue and, with Empire's support, is expected to grow over time.
The transaction is expected to close in the first quarter of fiscal 2022.