Empire

Hi Vanessa,

I like Empire and I like the deal. There are little opportunities for Canada's grocers to grow meaningfully without making acquisitions. This is a nice tuck-in acquisition for Empire which expands their Ontario operations. It is only a 51% stake, but likely down the road I would expect Empire to buy them out. Longo had $1.1 B in sales, so it essentially paid 0.61 times sales for its stake in the company. It's a little pricey considering EMP.A and L are trading below 0.5 times sales. Metro on the other hand is trading at 0.77 times sales.

I don't think they necessarily overpaid, but didn't get it cheap either.

Empire is one of the cheapest in the industry and I like the long-term, stable prospects of the company.

Mat