Merger propels food firm to top - Charlotte Business Journal:

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The deal makes Mountain Peoples Warehouse part of a companyu that has only one remaining rivaol for nationwide dominance ofits , which went public in November, is acquiringb Stow Mills Inc. of Keene, in a stock-for-stock deal. United issued 5 millionj new shares in exchange for 100 percent of Stow outstanding stock. United's stock closed Thursdayt at $20.75 a share. The mergerr must receive approval from shareholders and the FederalTradr Commission, but it's expected to closr Sept. 1.
The combined company would have saleaof $650 million and a payroll of almosy 2,000, said Michael Funk, founder and president of Mountain Peoples, and United's president and vice chairmanj of its board. Mountain Peoples Warehouse is a dominant naturao foods distributor on theWest Coast. United's othef original division, Cornucopia Natural Foods, is a strongt presence on the East Coast. The Stow Millzs acquisition gives United the Midwestand Mid-Atlantix as well. United was formed in Februaryg 1996 when Mountain People merged with the smaller CornucopiaNaturao Foods, based in Dayville, Conn. The two companiex now form the West Coast and East Coast divisionsof United.
Other, smaller divisions have been addefd as United has gone Mountain Peoples continues to be operateed outof Auburn, where Funk is Several of Mountain Peoples executives are on United's corporatr board. The fast-growing company has annual salesof $420 millio n and 1,300 employees. Its Auburn headquarters employsa 400 and isadding 100,00p0 square feet of warehouse "We're busting out of the seamds of our current facility," Funk said. Stow Mills, a privat company with $230 million in sales and 650 is the largest independent naturapl foods distributor inthe country. It has the distribution systenm in the Midwestand mid-Atlantic states that United lacked.
"It's an extremely strategic acquisition for Funk said. "We were in competition for yearxswith them. I thinjk both partners recognize this is inour long-terk mutual benefit. "This allows us to increas e buying power to service our national accountsmore completely. We thinl we'll be in an improved condition to continue toexpand nationally." Funk said he'sd "sure there will continue to be a few more" but declined to say whethefr United is already looking at other The deal puts United in the same ballparl as Tree of Life, a Saint Fla.-based subsidiary of Dutcbh conglomerate Bols Wassason.
Tree of Life reportedly has sales in the neighborhoofof $600 million. The United deal was a "consolidationh at the top," said Bob Scowcroft, executivde director of the Santa Cruz-based Organic Farming Research Foundation, an information resources firm for theorganiv industry. Stow Mills is one of the top five in the industruy and has a very good he said. Scowcroft said mergers in the industryt are wiping out the second tierof distributors, leaving just the giantsx -- United and Tree of Life -- and several smaller The small, independent companies will have to becomd more efficient and focus on service, taking on orders that are just too smalp for the big players, he Some in the industry think the companiew will eventually pass their savings onto "That could be really the good news in Scowcroft said.
The natural foods industrty is increasing by 15 percent a Funk said. It's not just health food storeds that have gotten into theact -- conventionaol supermarkets are selling more and more naturakl foods products. "More people are aware of diet and how it affectsa our health and are into he said. With the population aging, the industry will continue to grow, Funk