A grocery store chain which originated in Cornwall is being sold in a proposed $800 million deal. Ltd., Sobeys' parent company.
People who shop at Farm Boy are passionate, acknowledged Michael Medline, CEO of Empire Co.
The deal, which is expected to close in early 2019, is meant to ramp up Farm Boy's face in the GTA and southwestern Ontario through new stores and Sobeys store conversions.
Farm Boy may eventually expand to other areas of Canada, said a statement from co CEO Jeff York that called the sale an "extraordinary opportunity".
Plans are to "turbo-charge" Farm Boy's growth, doubling the size of the business in the next five years, the statement said.
Farm Boy opened its first grocery store in Cornwall in 1981, and offers fresh foods and its own private-label grocery products, a format which has drawn some comparisons to popular US food retail chain Trader Joe's. The chain now has 26 locations across southeastern Ontario. Empire will provide help with logistics and real estate, Medline said in the call.
Sales in the first year at the two Toronto area stores were 35 per cent higher than the average Farm Boy store, said Mike Vels, chief financial officer of Empire.
"This is a jewel of an asset", Medline told analysts on a call Monday discussing the transaction.
However, it's unclear how much things will change at the popular Ottawa stores known for their fresh produce, locally-sourced products and ready-to-eat prepared foods.
Farm Boy began its private label in 2012 and now offers 500 products.
Medline also assured the Ontario-based chain's customers Monday that they "would not see any changes in their Farm Boy shopping experience".
There are 14 Farm Boys in Ottawa.