The Strack & Van
Til grocery stores are now officially back in the family.
On Tuesday, the
U.S. Bankruptcy Court for the Northern District of Illinois approved a
purchase agreement under which the Indiana Grocers Group--comprised of both
the Strack and the Van Til families as well as other investors--will acquire
20 Strack & Van Til stores from the majority owner, the bankrupt Central
Grocers Inc. of Joliet, Ill.
Among the 20
stores: the Chesterton location at 1600 Pioneer Trail.
Group bid $91.3 million for the stores, or about 30 percent more than the
original $70-million bid made by Jewel-Osco, Central Grocers’
stalking-horse. Indiana Grocers Group will also pay up to an additional $30
million for remaining inventory.
Per the U.S.
Bankruptcy Court’s order, the purchase price includes the payment to
Jewel-Osco--from the proceeds of the sale--of a so-called “break-up fee” of
$3 million and reimbursement of up to $500,000 in expenses incurred by
Jewel-Osco in the stalking-horse process.
That order notes
that the purchase price bid by Indiana Grocers Group’s “constitutes fair and
reasonable consideration for the acquired assets, is the highest and best
offer for the acquired assets, and will provide a greater recovery for
(Central Grocers’) estates and creditors than would be provided by any other
practically available alternative.”
filed for Chapter 11 bankruptcy protection on May 4, attributing its dire
financial straits to a combination of factors, including online competition,
consumers’ changing tastes, and plummeting food prices which have prompted
grocery retailers to engage in “aggressive price wars.”
On May 13, Central
Grocers announced that Jewel-Osco had entered into a stalking-horse
agreement to acquire 19 Strack & Van Til stores for a total price of $100
million. Under the terms of that agreement, in the event of Central Grocers’
receiving a higher bid than $100 million, it would pay Jewel-Osco a
“break-up fee” and reimburse it up to $500,000 in expenses.
At the time
Jewel-Osco said that it had no plans to close any of the 19 Strack & Van Til
stores, including the Chesterton location, located roughly one and half
miles from Jewel-Osco’s store at 747 Indian Boundary Road.
Strack & Van Til in
In December 2012,
Strack & Van Til purchased eight groceries owned by WiseWay Supermarkets,
including WiseWay’s Chesterton location. Strack & Van Til immediately
undertook a major remodeling of the former WiseWay, which opened in February
2005. That 60,000-square foot grocery nearly tripled the space of the old
WiseWay--formerly Costas Foods--located at Broadway and Eighth Street in
The Strack & Van
Til chain had its origin in 1959, when independent grocers Ernie Strack and
Nick Van Til merged their businesses, bought a 10-acre parcel in Highland,
and built the first Strack & Van Til grocery. Over the years the company
opened new stores under the Strack & Van Til, Town & Country, and Ultra
Foods banners, at one point operating 38 different ones.