Associated Wholesalers Enters Into Asset Purchase Agreement With C&S Wholesale Grocers

ROBESONIA, Pa., Sept. 9, 2014 /PRNewswire/ -- Associated Wholesalers, Inc. ("AWI"), a regional cooperative food distributor, today announced that it has entered into an asset purchase agreement (the "APA") with C&S Wholesale Grocers ("C&S") pursuant to which C&S will acquire substantially all of AWI's assets, including its White Rose distribution business.  Under terms of the APA, C&S will serve as the "stalking horse bidder" in a court-supervised auction process.  Accordingly, the APA is subject to higher and otherwise better offers, among other conditions.

To facilitate the transaction process, AWI and its subsidiaries, including White Rose, today filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.  This action is expected to provide for an orderly sale of the AWI businesses under Section 363 of the Bankruptcy Code.

AWI and White Rose are expected to continue operating in the normal course during the sale process.

"We believe that the asset purchase agreement with C&S is in the best interest of AWI and its stakeholders," said Joyce Fasula and Mike Rothwell, Chairman and Vice-Chairman of the AWI Board of Directors, respectively.  "After conducting a thorough process, which included the exploration of a range of alternatives and reaching out to multiple interested parties, we determined the best course of action for AWI was to enter this agreement with C&S and to undertake the court-supervised sale process."

Matt Saunders, President and Chief Executive Officer of AWI said, "As we move through this transaction process, we will continue to focus on serving our customers.  We also intend to work closely with our suppliers and the winning bidder to help ensure that our customers continue to receive the level of service they expect."

"The addition of AWI and White Rose would expand C&S's footprint and enhance our significant capabilities in servicing independent grocers," said Rick Cohen, Chairman and CEO of C&S.  "AWI and White Rose have a terrific customer base, and their distribution capabilities are a natural complement to our existing portfolio.  We believe we are strongly positioned to provide all of their customers with the goods and services they need to successfully run and even grow their businesses."

In conjunction with the proposed transaction, AWI has received a commitment for "debtor in possession" financing to support its continued operations during the pendency of the sale process.  C&S has also made a commitment to participate in the "debtor in possession" financing package.  AWI has filed a number of customary motions seeking court authorization to continue to support its business operations during the transaction process, including the continued payment of employee wages, salaries and health benefits without interruption.  AWI has also asked for authority to continue existing customer programs and intends to pay suppliers in full under normal terms for goods and services provided after the filing date of September 9, 2014.

The proposed transaction with C&S is being completed pursuant to Section 363 of the U.S. Bankruptcy Code and is subject to, among other things, higher and otherwise better offers to purchase any or substantially all of AWI's assets, Court approval, antitrust approval, any other such approvals as may be required by law, and other customary conditions.  Given these conditions, there can be no assurance that the proposed transaction will be consummated.

Court documents and additional information can be found at a dedicated website administrated by AWI's Claims Agent, Epiq Systems: http://dm.epiq11.com/awi.

Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal advisors, Lazard Middle Market is serving as financial advisor, and Carl Marks Advisors is serving as restructuring advisor to AWI.

About Associated Wholesalers, Inc.

Associated Wholesalers, Inc. (AWI) is a cooperative food distributor organized to provide flexible distribution and retail services that promote the growth and profitability of its member retailers. Our flexible distribution programs give us the ability to service convenience stores, supermarkets and superettes with grocery, dairy, meat, produce, general merchandise and frozen food products. Our retailer services include insurance programs, computer systems, including hardware and software, store development, merchandising, advertising, customer service, retail accounting, store equipment and store counseling. These services are fee based and offered through the cooperative on a not-for-profit basis, giving our members the highest quality of services available to a chain at the lowest possible cost.

About C&S Wholesale Grocers, Inc.

C&S Wholesale Grocers, Inc. (C&S), based in Keene, New Hampshire, is the largest wholesale grocery supply company in the U.S., supplying independent supermarkets, chain stores, military bases, and other customers with over 150,000 different products.  C&S serves about 5,000 stores from more than 50 locations across the country.  It was founded in 1918 as a supplier to independent grocery stores, and now, in addition to its commitment to independent grocers, C&S services many large chains, including Stop & Shop, Giant of Carlisle, Giant of Landover, BI-LO/Winn-Dixie, Great Atlantic & Pacific Tea Co. (A&P), Safeway, and Target.

Contact:

Michael Freitag / Aaron Palash
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

SOURCE Associated Wholesalers, Inc.

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