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March 27, 2015 3:48 AM ET

Food and Staples Retailing

Company Overview of Sobeys Inc.

Company Overview

Sobeys Inc. engages in the food retailing business. It operates through five operating segments: Sobeys West, Sobeys Ontario, Sobeys Quebec, Sobeys Atlantic, and Lawtons. The company operates full service, fresh service, community services, price service, convenience service, and other format stores that provide groceries, fuel and convenience goods, healthcare and beauty products, health foods, and fresh foods. As of August 2, 2014, it owned or franchised approximately 1,500 stores in 10 provinces under the retail banners, such as Sobeys, Safeway, IGA, Foodland, FreshCo, Price Chopper, Thrifty Foods and Lawtons Drugs; and approximately 350 retail fuel locations. The company was founded in 1...

115 King Street

Stellarton, NS B0K 1S0

Canada

Founded in 1907

Phone:

902-752-8371

Key Executives for Sobeys Inc.

Chief Executive Officer, President and Chief Executive Officer of Empire Company Limited
Age: 52
Chief Financial & Administrative Officer
President of Multi-Format Operations
President of IGA Operations Business Unit
President of Operations - Safeway
Compensation as of Fiscal Year 2014.

Sobeys Inc. Key Developments

Sobeys Announces Unaudited Earnings Results for the 13 Weeks and 39 Weeks Ended January 31, 2015

Sobeys announced unaudited earnings results for the 13 weeks and 39 weeks ended January 31, 2015. For the 13 weeks, the company reported sales of CAD 5,940.5 million compared to CAD 6,004.4 million a year ago. EBITDA was CAD 284.3 million compared to CAD 182.3 million a year ago. Adjusted EBITDA was CAD 271.9 million compared to CAD 270.1 million a year ago. Operating income was CAD 165.8 million compared to CAD 58.8 million a year ago. Adjusted net earnings were CAD 92.2 million compared to CAD 80.7 million a year ago. Net earnings were CAD 95.5 million compared to CAD 3.9 million a year ago. The decline in sales, as expected, was primarily a result of retail store divestitures, store closures associated with the network rationalization and the decline in oil prices impacting fuel sales in the food retailing segment. The increase in EBITDA was primarily the result of reduced transaction costs associated with the Canada Safeway acquisition of CAD 0.8 million, the one-time inventory adjustment of CAD 17.1 million in the prior year and synergies realized of CAD 39.2 million related to the Canada Safeway acquisition. Cash flow from operating activities was CAD 343.7 million compared to CAD 167.4 million a year ago. Property, equipment and investment property purchases were CAD 171.3 million compared to CAD 165.3 million a year ago. For the 39 weeks, the company reported sales of CAD 18,158.3 million compared to CAD 15,016.1 million a year ago. EBITDA was CAD 915.0 million compared to CAD 587.6 million a year ago. Adjusted EBITDA was CAD 912.5 million compared to CAD 702.3 million a year ago. Operating income was CAD 553.6 million compared to CAD 285.6 million a year ago. Adjusted net earnings were CAD 326.0 million compared to CAD 241.1 million a year ago. Net earnings were CAD 309.4 million compared to CAD 139.4 million a year ago.

Urban Barns Foods Canada Inc. Signs Memorandum of Understanding with Sobeys Quebec

Urban Barns Foods Inc. announced that Urban Barns Foods Canada Inc. has signed a memorandum of understanding dated September 22, 2014 with Sobeys Quebec for the purpose of establishing a collaborative business relationship between the two businesses. The memorandum of understanding is for the test-marketing of produce grown and supplied by Urban Barns to six Sobeys Quebec grocery stores under the IGA banner in the Laurentians and in the City of Montreal. The produce to be tested over the coming weeks will be lettuce, basil and various varieties of micro-greens.

Sobeys Inc. Announces Pricing of $300.0 Million Aggregate Principal Amount of Senior Unsecured Notes Due July 14, 2016

Sobeys Inc. announced that it has priced an offering of $300.0 million aggregate principal amount of floating rate senior unsecured Notes due July 14, 2016. The notes are being offered through an agency syndicate consisting of Scotia Capital Inc. and BMO Nesbitt Burns Inc. as co-lead private placement agents, and including CIBC World Markets Inc., National Bank Financial Inc. and TD Securities Inc. The offering is expected to close on July 14, 2014, subject to customary closing conditions. The notes will be issued at par for aggregate gross proceeds of $300.0 million and will bear interest at a rate equal to the 3-month banker's acceptance rate (CDOR) plus 63 basis points (or 0.63%), to be set quarterly on the 14th day of July, October, January and April of each year. The interest rate for the initial quarterly period will be set on the expected closing date of July 14, 2014. Interest will be payable in cash quarterly, in arrears, over the two-year term on the 14th day of July, October, January and April of each year, commencing October 14, 2014. Sobeys intends to use the net proceeds of the offering to repay indebtedness outstanding under its existing non-revolving, amortizing term credit facility. Immediately following Sobeys' acquisition of the Canada Safeway business on November 4, 2013, the amount outstanding under this credit facility was $1,825.0 million. The current amount outstanding on this credit facility is $1,325.0 million and is expected to reduce to approximately $1,025.0 million as a result of the Notes offering. The notes are being offered in Canada on a private placement basis in reliance upon exemptions from the prospectus requirements under applicable securities legislation. The notes have not been and will not be qualified for sale to the public under applicable securities laws in Canada and, accordingly, any offer and sale of the notes in Canada will be made on a basis which is exempt from the prospectus requirements of such securities laws. The notes have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under, or an applicable exemption from the registration requirements of, the U.S. Securities Act.

Similar Private Companies By Industry

Company Name Region
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Highland Farms, Inc. Americas

Recent Private Companies Transactions

Type
Date
Target
Merger/Acquisition
September 30, 2014
Sobeys Inc., Frozen Food Factory
Private Placement
July 9, 2014
--
Merger/Acquisition
July 8, 2014
Sobeys Inc., Four Plants in Edmonton, Winnipeg, and Burnaby
 

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