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U Save Foods Inc., a wholly owned subsidiary of Minneapolis-based food distributor Nash Finch Company has inked an agreement to acquire Bag ‘N Save supermarkets located in Omaha and York, Nebraska.

Although the terms of the deal were not disclosed, the buyout will give Nash Finch 11 Bag 'N Save stores in the Omaha area and one in York. The deal is expected to be closed in the second quarter.

Founded in 1981, Bag ‘N Save chain is a family-owned business. The company’s product items range from grocery; dairy, frozen foods to non-food items, which are distributed through chain grocery stores in Nebraska.

Following the closure of the deal, Bag ‘N Save will become the third largest grocery chain among the retail groceries owned by Nash Finch. Sun Mart is the largest retail owned by Nash Finch and has 20 outlets. Sun Mart operates primarily in Nebraska, but also has stores in Moorhead and Little Falls.

The buyout of Bag ‘N Save grocery chain will take the total number of stores in Nebraska to 27, which is higher than the number of stores in any other state where Nash Finch operates.

Econofoods, with 13 supermarkets, is the second largest grocery chain after Sun Mart in Nash Finch’s bag. It distributes through its outlets in Minnesota and western Wisconsin.

Nash Finch reported its forth quarter and fiscal 2011 earnings result on March 1, 2012.

The fourth quarter 2011 earnings (excluding one-time items) of 97 cents per share beat the Zacks Consensus Estimate by 18.3%. However, it slipped 2.5% from the prior-year earnings of $1.00 per share, due to the ongoing macro-economic headwinds and increasing competition.

However, fiscal 2011 earnings increased 8.3% year over year to $3.89 per diluted share compared with $3.56 in the previous year. The fiscal-year adjusted earnings surpassed the Zacks Consensus Estimate by 4 cents.

Nash Finch declared a regular quarterly cash dividend of 18 cents per share of common stock. The dividend will be paid on March 23, 2012, to shareholders of record at the close of business on March 9, 2012.

Nash Finch currently has a Zacks #3 Rank which implies a short-term ‘Hold’ rating on the stock. On a long- term basis we remain ‘Neutral’ on the stock.

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