Sobeys parent company to acquire Farm Boy in $800 million deal

Irving Hamilton
September 24, 2018

The owner of Sobeys, Empire Company, has reached an agreement to purchase the Farm Boy grocery chain for $800 million.

This deal will accelerate plans for expansion in the Toronto area.

"It will be a growth vehicle in urban and suburban markets", Empire Chief Executive Michael Medline said, adding that he expected earnings before interest, tax, depreciation and amortization to double in five years.

Under the deal, Farm Boy will be set up as a separate company and continue to be led by founder and co-CEO Jean-Louis Bellemare and Jeff York, who has been the other co-CEO since 2009. Some Sobeys stores may be converted to Farm Boys.

Farm Boy opened its first grocery store in Cornwall in 1981, and offers fresh foods and its own private-label grocery products, a format which has drawn some comparisons to popular US food retail chain Trader Joe's.

Bellemare and his girlfriend - now wife - opened the first Farm Boy store in Cornwall in 1981, expanding to Ottawa the next year.

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However, he noted that there are some aspects of Empire, such as real estate expertise, that Farm Boy will be able to leverage. The chain now has 26 locations across southeastern Ontario and earlier this year opened its first stores in the Greater Toronto area.

Farm Boy stores are also more profitable than the average grocery chain, according to statistics from Empire.

Medline said Farm Boy has a winning formula, calling it a "jewel of an asset".

However, it's unclear how much things will change at the popular Ottawa stores known for their fresh produce, locally-sourced products and ready-to-eat prepared foods.

There are 14 Farm Boys in Ottawa.

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