The parent company of Sobeys said it has signed a deal to buy a 51 per cent stake in specialty grocery store chain Longo’s and its Grocery Gateway e-commerce business for $357 million.
Empire Company Ltd. said the deal adds two high-quality banners to its business and helps it grow in Ontario.
Under the deal, Toronto-area grocer Longo’s and Grocery Gateway will continue to be led by CEO Anthony Longo. However, Empire said Longo’s will be able to benefit from its infrastructure and capabilities in areas such as sourcing, logistics and real estate.
“Longo’s has built one of the most successful and sought-after brands in the [Greater Toronto Area] and Southwestern Ontario,” said Michael Medline, Empire’s president and CEO, in a news release. “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.”
Longo’s — which was founded in 1956 in Toronto by brothers Tommy, Joe and Gus Longo — has 36 locations in the GTA, while Grocery Gateway serves 70,000 customers. Empire’s brands in Ontario include Sobeys, Foodland, FreshCo, Farm Boy and e-commerce business Voilà.
“With strong alignment to our family values and purpose, we look forward to working together with Empire to bring the Longo’s experience to even more Canadian families,” said Anthony Longo, Longo’s president and CEO, in a news release. “The more we learned about Empire, the clearer it became that this was the right team to partner with to support our next chapter of growth.
“And of course, we will continue to offer the same high-quality service and fresh products, exceptional private-label offering and the convenience of e-commerce that our guests have come to know and love.”
The acquisition price of $357 million for 51 per cent is based on an enterprise value of $700 million, Empire, which is based in Stellarton, N.S., said in a news release.
The deal, which is subject to customary closing conditions, is expected to close in the first quarter of Empire’s 2022 financial year.