Puregold to acquire 14 DiviMart Supermarkets

Puregold [PGOLD 29.00 2.8%; 106% avgVol] [link] said that its board approved the acquisition of 14 DiviMart Supermarket locations from the owners of the DiviMart chain, Harry Uy and Vivian Ong Juanitas.

While the final price for the transaction is still being determined, PGOLD said that it will be below the 10% threshold of PGOLD’s book value which would necessitate a more comprehensive disclosure.

The parties appear to be exploring the possibility of including another 18 DiviMart locations, as PGOLD said that these locations would be “evaluated for possible conversion into Puregold stores”. DiviMart has more than 30 locations nationwide.

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I’m surprised that we haven’t seen more acquisitions like this in the grocery space, since it’s a straightforward way for the acquiring company to expand its footprint.

PGOLD is able to accelerate its move into these regions by taking advantage of the acquired chain’s existing customer base. Sure, there might be an awkward period when the signage and product mix changes to reflect PGOLD’s brand and priorities, but it’s nothing like the awkward period that a brand new store would take to go from grand opening to mature operations.

PGOLD had 452 locations of its Puregold brand at the end of 2022, so a full acquisition of the DiviMart brand would increase its store count by 7% in one transaction.