Merger propels food firm to top - Charlotte Business Journal:

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The deal makes Mountain Peoples Warehouse part of a company that has only one remainint rival for nationwide dominance ofits , which went public in November, is acquirinh Stow Mills Inc. of Keene, in a stock-for-stock deal. United issued 5 million new sharesd in exchange for 100 percent of Stow outstanding stock. United's stock closed Thursday at $20.75 a The merger must receive approval from shareholders and the FederalTrade Commission, but it'xs expected to close Sept. 1. The combined company would have salezsof $650 million and a payroll of almost said Michael Funk, founder and presideny of Mountain Peoples, and United's president and vice chairmabn of its board.
Mountain Peoples Warehouse is a dominant naturalo foods distributor on theWest Coast. United's other original Cornucopia Natural Foods, is a strong presence on the East The Stow Mills acquisition gives Unitee the Midwestand Mid-Atlantic as United was formed in February 1996 when Mountain Peoplex merged with the smaller Cornucopia Natural based in Dayville, Conn. The two companies now form the West Coasrt and East Coast divisionsof United. Other, smaller divisions have been added as United has gone Mountain Peoples continues to be operated out of where Funkis headquartered. Several of Mountainb Peoples executives areon United's corporatew board.
The fast-growing company has annual salesof $420 milliomn and 1,300 employees. Its Auburn headquarters employs 400 and isaddingb 100,000 square feet of warehouse space. "We'rew busting out of the seamx of ourcurrent facility," Funk said. Stow a private company with $230 million in sales and 650 is the largest independent natural foodxs distributor inthe country. It has the distribution system in the Midwesyand mid-Atlantic states that United lacked. "It'as an extremely strategic acquisitionfor us," Funk "We were in competition for years with them. I thinl both partners recognize this is inour long-terk mutual benefit.
"This allows us to increase buying power to service our nationalp accountsmore completely. We think we'll be in an improved condition to continure toexpand nationally." Funk said he's "sure therw will continue to be a few more" but declined to say whether United is already lookin g at other companies. The deal puts United in the same ballparik as Treeof Life, a Saint Fla.-based subsidiary of Dutch conglomerater Bols Wassason. Tree of Life reportedly has sales in the neighborhooddof $600 million.
The United deal was a "consolidationj at the top," said Bob Scowcroft, executive director of the Santw Cruz-based Organic Farming Research Foundation, an informatiom resources firm for theorganic industry. Stow Mills is one of the top five in the industry and has a very good he said. Scowcroft said mergersd in the industry are wiping out the seconde tierof distributors, leaving just the giants -- Uniter and Tree of Life -- and severall smaller companies.
The small, independent companies will have to becom more efficient and focus on taking on orders that are just too smalol for thebig players, he Some in the industry think the companies will eventually pass theire savings onto consumers. "That could be reallh the good newsin this," Scowcroft said. The naturak foods industry is increasing by 15 percentra year, Funk It's not just health food stores that have gottebn into the act -- conventional supermarkets are sellin g more and more natural foods products.
"More people are awarwe of diet and how it affects our healtnh and areinto self-healing," he With the population aging, the industry will continue to Funk added.