MINNEAPOLIS -- Nash Finch here said last week that it is going to add to its corporate retail operations through a cash stock purchase of Erickson's Diversified Corp,, which operates 18 supermarkets in Minnesota and Wisconsin.
Erickson's, based in Hudson, Wis., operates its stores under the banners More-4, Econofoods, Food Bonanza and Erickson's City Market. The retailer has 12 stores in Minnesota and six in Wisconsin.
The terms of the transaction were not disclosed and the stock purchase is still subject to Federal Trade Commission and other approvals.
Part of Nash Finch's strategic plan is to grow corporate retail, said Norman Soland, senior vice president, secretary and general counsel for Nash Finch.
The wholesaler currently owns 90 corporate retail locations in 12 states that primarily operate under the banners Econofoods, Sun Mart, IGA and Family Thrift Center.
"They are in our trade area, they're a customer and it increases our corporate retail presence," Soland added. "It's a good fit."
Steve Erickson, president of Erickson's Diversified Corp. and third-generation supermarket retailer, would not remain with the company. He said it is a good time to make a deal and said several factors weighed in the decision to sell to Nash Finch.
"We found ourselves in a position to either acquire [and grow], or we needed to get [out]," Erickson told SN. "We are too small to be big and too big to be small," he added.
Erickson also cited the rapid industry consolidation, Wal-Mart's increasing presence and a large gap in family succession as some other reasons to sell the 77-year-old family business at this time.
Erickson, who is 44 years old and has worked in the industry since he was 17, said that his five-year-old son would have been the closest family member that could have taken over the business. He noted that he didn't want to wait that long.
EDC, which is coming off its most successful year with sales of about $220 million, said that it wanted to sell in a "position of power."
After a meeting with Nash Finch's chief executive officer, Ron Marshall, in December 1998, the deal proceeded.