The parent company of Sobeys, Empire Company Limited, announced today an agreement to purchase 51 per cent of Longo’s and Grocery Gateway, accelerates growing presence in Ontario

Empire building momentum and increasing footprint in the Greater Toronto Area of Ontario:

• 36 Longo’s locations to join Empire’s growing store network in Ontario
• Grocery Gateway adds 70,000 long-standing online customers to Empire’s e-commerce business
• Longo’s and Grocery Gateway will continue to be operated by the successful Longo’s leadership team, led by President and CEO, Anthony Longo
• Empire and Longo’s will together unlock non-customer facing synergies and other benefits
• Acquisition price of $357 million for 51% is based on an enterprise value of $700 million
• Expected to be accretive to earnings per share in the first full fiscal year after closing

Empire Company Limited (“Empire” or the “Company”) (TSX: EMP.A) announced today that it has signed an agreement to purchase 51% of Longo’s, a long-standing, family-built network of specialty grocery stores in the GTA of Ontario, and the Grocery Gateway e-commerce business.

The transaction immediately adds two high-quality banners to Empire’s growing grocery store and e-commerce businesses in Ontario. Longo’s and Grocery Gateway are powerful strategic additions to Empire’s family of brands in the province – Sobeys, Foodland, FreshCo, Farm Boy and Voilà. Longo’s operates an excellent business with a very strong brand in the GTA and Southwestern Ontario, the largest grocery market in Canada, and furthers Empire’s strategic goal of growing its market presence in Ontario.

“Empire has strong momentum and we are laser-focused on our Project Horizon growth plans in key markets like the GTA, both in bricks and mortar and e-commerce,” said Michael Medline, President and CEO, Empire. “Longo’s has built one of the most successful and sought-after brands in the GTA and Southwestern Ontario. Longo’s is a crown jewel of grocery and as a values-driven company, Longo’s culture aligns closely with Empire. We couldn’t be happier to be partnering with Anthony and the Longo’s team.”

Empire’s success with the Farm Boy acquisition has set a strong foundation to welcome the Longo’s and Grocery Gateway businesses into its family of banners. The Company will continue to grow the Longo’s and Grocery Gateway businesses while unlocking benefits through non-customer facing synergies. Longo’s and Grocery Gateway customers will see no changes to their experience. Longo’s plans to open several new stores over the next five years.

“With strong alignment to our family values and purpose, we look forward to working together with Empire to bring the Longo’s experience to even more Canadian families,” said Anthony Longo, President and CEO, Longo’s. “The more we learned about Empire, the clearer it became that this was the right team to partner with to support our next chapter of growth. And of course, we will continue to offer the same high-quality service and fresh products, exceptional private-label offering and the convenience of e-commerce that our guests have come to know and love.”

Grocery Gateway, which currently serves 70,000 loyal customers, will continue as a stand-alone business. Empire will continue to invest in the growth of Grocery Gateway’s customer base, while seeking efficiencies through collaboration with Empire’s fast growing Voilà online business.

Longo’s will continue to be led by President and CEO, Anthony Longo, and his team of talented food retail executives. Although managed separately, Longo’s will benefit from Empire’s infrastructure and capabilities, in areas such as Sourcing, Logistics and Real Estate. The Longo’s commitment to community and philanthropy through the Longo’s Family Charitable Foundation will continue and, with Empire’s support, is expected to grow over time.

Founded in 1956, the first Longo’s store was opened by three brothers, Tommy, Joe and Gus Longo. Today the business has grown to 36 locations in the GTA, including 10 new stores in the last 5 years and the Grocery Gateway e-commerce business. Sales were approximately $1.1 billion for the year ended February 28, 2021. Longo’s has developed strong customer loyalty by focusing on providing guests (customers) in their stores with fresh, high-quality products, including a variety of prepared foods, and an exceptional assortment of private label products, all paired with remarkable service from their team members. The Longo family has expressed their intentions to remain as long-term shareholders of Longo’s.