Whole Foods, Wild Oats merger closes

AUSTIN, Texas and BOULDER, Colo. After a long battle with the Federal Trade Commission over whether or not the merger violated antitrust laws, the Whole Foods Market and Wild Oats Markets merger has closed. The companies announced today that Whole Foods Market has purchased 84.1% of Wild Oats Markets' outstanding common stock in a cash tender offer of $18.50 per share, and will purchase as delivered over the next three business days approximately 12.7% of the outstanding shares of Wild Oats Markets common stock, represented by the shares subject to guaranteed delivery. Whole Foods Market will acquire all of the remaining outstanding shares of Wild Oats Markets common stock pursuant to the short-form merger procedure available under Delaware law. Whole Foods Market has also assumed existing debt, net of cash, totaling approximately $137 million. Whole Foods Market has entered into a five-year $700 million senior term loan agreement to fund the transaction, and has signed a new five-year $250 million revolving credit agreement, which will replace its existing $200 million revolver.

"Wild Oats Markets and Whole Foods Market have both had a large and positive impact on the natural and organic foods movement throughout the United States, leading the industry to nationwide acceptance and helping it become one of the fastest growing segments in food retailing today," said John Mackey, chairman, ceo, and co-founder of Whole Foods Market.. "Our companies have similar missions and core values, and we believe this merger will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members."

All of Whole Foods Market's 11 operating regions will gain stores, with three of its smallest regions gaining critical mass, and Whole Foods Market will gain immediate entry into a significant number of new markets. Whole Foods Market will evaluate each store to see how it fits into its overall brand and real estate strategy. Wild Oats Markets has been rationalizing its store base over the last several years to shed underperforming stores, but some additional store closures are expected as well as the relocation of some stores that overlap with stores Whole Foods Market currently has in development. Whole Foods Market expects to make significant investments in upgrading and improving stores before eventually re-branding them as Whole Foods Market stores.

Approximately $3.8 million in direct acquisition-related costs had been incurred by Whole Foods Market through July 1. These costs, along with any additional acquisition-related costs incurred since that time, will be capitalized as part of goodwill.