N.S.-Based Empire Buys Ontario Grocery Chain For $357-Million
HALIFAX — The company that owns Sobeys, Lawtons, and several other grocery brands is adding an Ontario specialty grocer to its portfolio.
Empire Company Ltd., which trades on the TSX and has a current market cap of $6.6-billion, announced today it will buy 51 percent of Longo’s, a family-owned grocery store operating primarily out of the Greater Toronto Area.
The purchase will add Longo’s 36 stores to Empire’s grocery network. Empire will also take over Longo’s longstanding grocery delivery brand, Grocery Gateway.
The deal will see Empire pay $357-million for 51 percent of Longo’s shares (based on Longo’s $700 million total enterprise value) and is structured to eventually give Empire 100 percent ownership.
The deal must still clear the customary closing hurdles but is expected to close in 2022.
Empire says it plans to grow both Longo’s and Grocery Gateway, and Longo’s plans to open several new stores over the next five years.
Both will continue to operate as their own brands with Empire looking to consolidate some behind-the-scenes operations. Longo’s and Grocery Gateway will continue to run under the leadership of current president and CEO Anthony Longo and his team.
“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 president and CEO, Michael Medline, said in a news release.
Medline said the purchase continues the Empire’s plans to grow into “key markets like the GTA, both in bricks and mortar and e-commerce.”
In 2018, Empire paid $800-million to acquire another Ontario-based grocery store chain, Farm Boy. It has since grown the chain from 26 locations to 36, with plans for several more locations in 2021.
Empire also hopes Grocery Gateway will help bolster its e-commerce operations in Ontario. The company launched its own grocery delivery service, Voila, last year. Financial results for Empire’s third fiscal quarter show e-commerce sales growing 315 percent compared to the prior year.