Whole Foods Gone Wild

Two giants of the organic and natural foods industry shook hands Wednesday, when Whole Foods announced that it will acquire Wild Oats—its leading competitor—for $565 million in cash.  Austin, Texas-based Whole Foods will buy all outstanding Wild Oats stock at $18.50 per share, and will also assume Wild Oats’ approximately $106 million in debt.  The deal marks the largest of Whole Foods' 18 retail acquisitions to date.

Wild Oats, based in Boulder, Colorado, has annual sales of about $1.2 billion, and operates 110 stores in 24 states and British Columbia, Canada.  You can find them under the nameplates Wild Oats Marketplace, Henry's Farmers Market, Sun Harvest, and Capers Community.  As reported by the Austin-American Statesman, John Mackey, chairman, chief executive officer, and co-founder of Whole Foods Market, said of the merger:

“Our companies have similar missions and core values, and we believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members.”

“The growth opportunity in this category has led to increased competition from many players, most of whom are not dedicated natural and organic foods supermarkets, but are considerably larger than we are.”

Synergies, exciting opportunities, team members... holy PR speak, Batman.  But we think we get Mackey’s point: conventional supermarkets, time to go to the mattresses.