Northeast Cooperatives Members to Vote on Merger

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Northeast Cooperatives Members to Vote on Merger

Wed, 10/23/2002 - 8:00pm -- tim

Northeast Cooperatives’ Board of Directors announced that it is recommending to the membership that Northeast Cooperatives be combined with United Natural Foods, Inc. (UNFI) through a merger. The agreement is subject to approval of Northeast Cooperative’s members. Terms of the merger agreement are private.
The accelerating trend towards consolidation in the natural foods industry and the pressure for all grocery distributors to continue to achieve increasing and similar economies of scale was a factor in Northeast’s Board of Directors’ decision. Tim Kraus, President and Chairperson of Northeast Cooperatives’ Board of Directors said, “After extensive consideration of values, economics, pricing, service parameters and a competitive biding process, the Board of Directors was unanimous in selecting UNFI as the best distribution partner for our members and customers. UNFI’s history, product line, and service to the marketplace are similar in many ways to Northeast’s. Like Northeast, UNFI has a long history of support for the issues that concern our members, such as organic foods.”
Past President and current member of Northeast Cooperatives’ Board of Directors, Terry Appleby said, “The Board fully recognizes the seriousness and finality of this step. The decision to recommend this merger to the members is based on many years of analysis of industry trends and extensive exploration of Northeast’s options by management and the Board of Directors. To ensure the long-term success of our members and their access to a reliable source of supply and services, the Board is convinced this is the right time to sell and the right partner.”
David Fowle, past President and current member of Northeast’s Board said, “Many of the benefits of the merger will be tangible and immediate to Northeast’s members and customers, such as improved service levels, continued long term improvement of distribution capabilities and capacity and continued access to sources of supply though favorable supply agreements. This is of importance to our diverse membership base, particularly buying clubs.”
CEO George Southworth said, “Substantially all of the staff will be retained at close of the transaction. As UNFI integrates the operations over the next year, many of the staff will be transferred to the UNFI Chesterfield N.H. facility 9 miles from Northeast Cooperatives’ Brattleboro facility. It is expected that those staff released from service will receive ample notice. Severance for those staff released is a significant and important part of the agreement.”
Northeast Cooperatives’ members will vote on the proposal in early December 2002. With the members’ approval, the transaction would close shortly thereafter.