Grocery and liquor wholesaler Metcash Ltd
(ASX:MTS) has acquired the Franklins supermarket chain in NSW for around $215 million.
Metcash says it has entered into an agreement with Pick n Pay Retailers of South Africa to acquire the shares of Interfrank Group Holdings who owns the Franklins business.
The Franklins chain consists of 85 supermarkets, comprising 77 corporate stores plus 8 franchised stores.
Metcash says in keeping with its core value of championing its independent retailer customers, it plans to sell the stores to independent IGA retailers.
The company says the acquisition is expected to add more than $500 million per annum of wholesale sales to its business.
Metcash says the uplift in the first full year after selling the stores is expected to be between 1.5 cents and 2 cents per share.
The transaction is subject to ACCC approval and will be funded from existing Metcash bank facilities.
Metcash says it expects the transaction to be completed by September 30, 2010.
Metcash booked a $227.6 million profit for the year to April 30, 2010.
