DALLAS, Feb. 7 /PRNewswire/ -- Fleming Companies, Inc. (NYSE: FLM)
announced today that The Yucaipa Companies, a private investment firm based in
Los Angeles, will make a $50 million investment in Fleming. Yucaipa will hold
approximately 3.8 million newly-issued common shares, representing
approximately 8.7 percent of Fleming's outstanding stock. In addition,
Yucaipa has a 12-month option to purchase an additional $50 million of
Fleming's common stock at the then-current average market price of Fleming's
stock.
Yucaipa's investment is especially significant because it comes on the
heels of the $4.5 billion alliance announced today in which Fleming will be
the sole provider of the food and consumable products in all current and
future Kmart and Kmart supercenter stores. Yucaipa's investments in both
Fleming and Kmart are seen as strong endorsements of the alliance. "Both
companies prosper from this alliance," said Ron Burkle, managing general
partner and founder of Yucaipa. "Kmart will achieve an improved, lower cost
distribution system, and Fleming will benefit from higher volumes in its
central procurement organization and more efficient logistics operations."
Fleming is currently completing a two-year restructuring program that has
taken the company from its traditional wholesale grocery supply roots to a
new, streamlined logistics business with core competencies in procurement,
distribution, and value-retail operations. "We have been very impressed with
the steps taken by Fleming to distinguish itself from its traditional
competitors," said Mr. Burkle. "It has created a supply chain infrastructure
that can support the critical backstage needs of retailers from coast-to-coast
and in varying retail niches."
"We are very pleased to have Ron Burkle as a major shareholder," said Mark
Hansen, chairman of the board and chief executive officer of Fleming. "Ron's
expertise and insight in the retail industry date back to his own days as the
owner of independent retail food stores. He will be of tremendous value to
Fleming and all of our customers. He clearly understands how our strategic
initiatives have positioned us for leadership in our industry."
The investment is subject to customary closing conditions, including
governmental approvals.
Investor Conference Webcast and Replay
A one-hour long conference call for shareholders and analysts will be
broadcast on the world wide web beginning today at 11:00 a.m. Eastern Standard
Time. To listen, log on to http://www.fleming.com . A replay of the conference call
will also be available beginning at 2:00 p.m. Eastern Standard Time on
February 7, 2001 and will continue until February 14, 2001. The dial-in phone
number for the replay is 719.457.0820, confirmation code 723307.
Fleming is a $15 billion company and industry leader in distribution and
has a growing presence in value retailing. Fleming's primary business is
buying and selling merchandise. The company serves approximately
3,000 supermarkets including more than 800 North American stores of global
supermarketer IGA, 3,000 convenience stores and nearly 1,000 supercenters,
discount, limited assortment, drug, specialty, and other businesses across the
country. To learn more about Fleming, visit our website at http://www.fleming.com .
The Yucaipa Companies is a Los Angeles-based investment firm with
expertise in retail and distribution. Since its founding in 1986, the firm
has completed mergers and acquisitions valued at more than $30 billion
including the merger of Fred Meyer, Inc. and the Kroger Company, which formed
the largest supermarket chain in the nation.
CONTACTS:
(Media) Shane Boyd 972.906.8824
(Investors-Equity) Meredith Anderson 972.906.8592
(Investors-Debt) Alan McIntyre 972.906.8126
SOURCE Fleming
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Related links:
http://www.fleming.com
CONTACT:
media, Shane Boyd, +1-972-906-8824, or
investors-equity, Meredith Anderson, +1-972-906-8592, or
investors-debt, Alan McIntyre, +1-972-906-8126, all of Fleming
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