UNFI Sells Nonfood Business

SN STAFF

PROVIDENCE, R.I. — United Natural Foods Inc. here said Friday it has agreed to sell its nonfood business to L&R Distributors, New York. Terms of the transaction were not disclosed.

UNFI said the sale, which is expected to close by the end of UNFI's fiscal second quarter on Oct. 29, would allow it to "concentrate on its core business of the distribution of natural, organic, and specialty foods and products." It had acquired the nonfood and general merchandise business as part of its 2007 acquisition of Millbrook Distribution Services.

In a statement, L&R said it "will become UNFI's nonfoods distributor of choice." L&R is a privately held, national distributor of specialty nonfood merchandise to supermarkets, national and independent drug stores, mass retail stores and the military.

Following the sale, UNFI said it would cease operations at its Harrison, Ark., warehouse. All specialty food products distributed from Harrison will be transferred to UNFI's other distribution centers.

As a result of this transaction and the closure of the Harrison facility, UNFI said expects to incur restructuring and impairment charges of approximately $11 million to $12.5 million during the fourth quarter of fiscal 2011 and first quarter of fiscal 2012. The company said it expects this divestiture and related closure of the Harrison facility will be accretive to net income, excluding the restructuring and impairment charges, by approximately $1.5 million to $2 million annually.