Discount retailer Grocery Outlet plans to acquire Southern value grocer United Grocery Outlet for $62 million, a move that would expand its reach into Alabama.

The California-based company said that the deal would come with 40 stores and a distribution center and would expand Grocery Outlet’s footprint into Alabama, Tennessee, North Carolina, Georgia, Kentucky, and Virginia, reports Market Watch.

“United Grocery Outlet is a natural fit given our similar opportunistic buying strategies, customer value propositions, and shared mission of serving our communities. This acquisition provides Grocery Outlet with scale in a new region as well as a platform for future expansion in the Southeast,” Grocery Outlet President and CEO RJ Sheedy said in a statement.

Athens, Tennessee-based United Grocery Outlet currently operates more than 25 stores around the Southeast, including one in Alabama.

According to Grocery Dive, the Grocery Outlet plans to open 15 to 20 stores in existing markets this year for a total of 55 to 60 net new stores in 2024.

The acquisition is expected to close early in the second quarter.