Ares Management has signed an agreement to acquire a majority stake in Smart & Final, a multi-format retailer serving both households and smaller businesses and a portfolio company of Apollo Global Management, for $975 million. The senior management team of Smart & Final will own a minority stake in the company.
Ares Management has secured commitments from Morgan Stanley, Bank of America Merrill Lynch, Credit Suisse, and Deutsche Bank Securities to provide debt financing for the transaction.
“We are delighted to join Smart & Final’s senior management team as long-term investors in the company,” said David Kaplan, Senior Partner and Founding Member of Ares Management. “Smart & Final occupies an attractive position in the marketplace by delivering compelling value and merchandise to its loyal customers. We share management’s vision for the company and believe it is well positioned for future growth.”
Smart & Final is a smaller store, warehouse-style, “no membership fee,” multi-format retailer serving both households and smaller businesses. The company operates 235 stores under three formats: Smart & Final, Smart & Final Extra!, and Cash & Carry. The stores operate in six western U.S. states (California, Nevada, Arizona, Oregon, Idaho, and Washington), with an additional 13 joint-venture stores in northwest Mexico. Smart & Final is based in Commerce, CA (www.smartand final.com).
“We are looking forward to our partnership with Ares Management, whose strong, committed financial sponsorship and great track record in the retail sector speak for itself,” said Dave Hirz, Smart & Final’s President and Chief Executive Officer. “The entire senior management team of Smart & Final is very excited about having Ares’ support in further building Smart & Final into a world-class organization.”
Ares Management has $54 billion in capital under management and invests in private equity, leveraged loans, high-yield bonds, distressed debt and private debt. The firm has approximately 450 employees and is headquartered in Los Angeles, CA with offices in New York, London, Chicago, and Atlanta (www.aresmgmt.com).
© 2012 PEPD • Private Equity’s Leading News Magazine • 10-12-12