Under the agreement, prospective store buyers Kroger and Fresh Encounter would be able to operate pharmacies at the locations much sooner than rival CVS expected.
An Ohio-based grocery chain will take ownership of 15 Marsh Supermarkets stores — including one in Columbus — on June 22, the company announced Wednesday.
Findlay, Ohio based-Fresh Encounter, Inc. said it has entered into a definitive agreement to manage the Marsh Supermarkets on behalf of Generative Growth II, LLC, a privately held company based in Findlay.
Generative Growth II, LLC is a wholly owned corporation whose members include experienced third-generation grocers Michael S. Needler, Jr. and Julie Needler Anderson.
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Marsh filed for protection under Chapter 11 of the U.S. Bankruptcy Code in May after closing 19 stores.
Besides the Columbus store, a Marsh Hometown Market at 3075 E. 25th St. in Columbus, the 14 other stores being acquired by the Findley chain are located in the Indiana communities of New Palestine, Marion, Hartford City, Elwood, Tipton, Pendleton, Richmond, Greensburg and two stores in Indianapolis, plus Ohio stores in Troy, Van Wert, Middleton and Eaton.
“This acquisition will be beneficial for both Fresh Encounter and the associates of the former Marsh Supermarket locations,” said Needler, CEO and president of Fresh Encounter, Inc., which manages 44 stores in Ohio, Kentucky and Indiana.
“Marsh has been a noble contender in the grocery retail arena for over 86 years. We look forward to continuing their legacy of serving the customer with the best in fresh offerings and excellent customer service, and returning the stores to a community focused, family owned organization.”
Fresh Encounter will pay a total of $7.8 million, but just $1.5 million for the 15 stores, or $100,000 each. The remainder, $6.3 million, is for the inventory that Fresh Encounter will liquidate.
Additionally, Cincinnati-based Kroger Co. entity Topvalco Inc. plans to spend $16 million to acquire 11 Marsh stores. That includes two each in Indianapolis, Zionsville, Bloomington and Muncie and single stores in Fishers, Browsburg and Greenwood.
The $16 million Kroger has agreed to pay for 11 stores did not include any inventory.
Eighteen other Marsh stores did not fetch any interest at auction.
Overall, Marsh received bids from seven parties. The identities of the unsuccessful bidders were not disclosed during the court hearing.
The two Ohio-based grocery chains that agreed to purchase the 26 stores from Marsh reached a settlement Wednesday with CVS Health.
During a hearing in U.S. bankruptcy court in Delaware, attorneys for the Rhode Island-based pharmacy giant said they no longer objected to the store acquisitions, after the two buyers agreed not to open pharmacies in the stores until at least Jan. 31, 2018.
That’s a lot quicker than what CVS had expected, however, when it paid $38 million in April to buy the pharmacy accounts and inventory of the 37 stores where Marsh operated pharmacies. CVS was fighting to enforce a provision in that deal barring those stores from reopening pharmacies for five years.
Marsh contended that the CVS agreement only barred Marsh itself from operating pharmacies at the locations. Further, it asserted that even if the condition did apply to buyers, the language was unenforceable under the bankruptcy code.
The Indianapolis Business Journal contributed to this report.
