Tags: Apollo Global | Grocery Chain | Fresh Market | Grocer

Apollo Global Adds Grocery Chain Fresh Market to Shopping Cart

Image: Apollo Global Adds Grocery Chain Fresh Market to Shopping Cart
(AP)

Monday, 14 Mar 2016 11:34 AM


Specialty grocery retailer Fresh Market Inc. said on Monday it agreed to be acquired by private equity firm Apollo Global Management LLC for about $1.36 billion in cash.

The company's shares rose a record 23.89 percent to $28.47, just shy of the $28.50 per-share offer.

Fresh Market said chairman and founder Ray Berry had recused himself from voting on the deal, which was unanimously approved by the board.

Reuters had earlier reported, citing sources, that Berry was himself considering taking the company private.

Berry and his son Brett, who together own about 9.8 percent of Fresh Market's outstanding shares, will not tender their shares into the offer but will participate and roll over the vast majority of their holdings, the company said.

Specialty grocery retailers such as Fresh Market have been struggling to find a niche after being squeezed by Wal-Mart Stores Inc and Kroger Co on the low end, while Whole Foods Market Inc, which has many more stores, dominates the top end.

Same-store sales at Fresh Market, which operates 183 stores across 27 states, have declined in the past three quarters.

The acquisition makes strategic sense for both parties, said Neil Saunders, CEO of research firm Conlumino.

For Fresh Market, Apollo will provide the financial muscle and operational maturity to grow into a larger entity. For Apollo, it is an investment that has the prospect of generating good longer-term return, Saunders said.

Apollo's past investments in the U.S. grocery industry include Sprouts Farmers Market and Smart & Final Stores Inc.

George Golleher, a long-term operating partner with Apollo and former Chief Executive of Smart & Final Stores and Ralphs Grocery Company/Food-4-Less, will be a co-investor with the Apollo funds in the deal, the company said.

Fresh Market said it had a 21-day period to solicit superior offers.

Apollo has fully committed financing in place for the deal, which is expected to close in the second quarter, Fresh Market said.

J.P. Morgan Securities is financial adviser to Fresh Market, while Barclays, RBC Capital Markets, Jefferies and Macquarie Capital are advising Apollo.

Shares of Greensboro, North Carolina-based Fresh Market were up 23.7 percent at $28.42.

Up to Friday's close, the stock had risen about 24 percent since Feb. 10, the day before Reuters reported that Apollo Global was among buyout firms participating in an auction process for Fresh Market.


© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
Companies
Specialty grocery retailer Fresh Market Inc. said on Monday it agreed to be acquired by private equity firm Apollo Global Management LLC for about $1.36 billion in cash.
Apollo Global, Grocery Chain, Fresh Market, Grocer
389
2016-34-14
Monday, 14 Mar 2016 11:34 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved