Grocery Outlet, a portfolio company of Berkshire Partners since 2009, has entered into an agreement to be acquired by Hellman & Friedman and the senior management team of the company.
Grocery Outlet is one of the nation’s largest grocery extreme-value retailers. The company offers branded grocery products at significant discounts through a sourcing model of purchasing discounted surplus inventory directly from over 3,000 supplier partners. Grocery Outlet carries refrigerated and frozen foods, fresh produce, fresh meat, organics, dry groceries, beer and wine, health and beauty care, over-the-counter drugs, and household products. Grocery Outlet operates more than 210 stores in California, Idaho, Nevada, Oregon, Washington, and Pennsylvania. Most of the stores are independently owned and operated by locally-based families. The company was founded in 1946 by Jim Read and continues to be operated by the Read family, with third-generation family members MacGregor Read and Eric Lindberg currently leading the business as Co-Chief Executive Officers. Grocery Outlet is headquartered near San Francisco in Emeryville, CA (www.groceryoutlet.com).
“Grocery Outlet’s unique operating model delivers tremendous value to consumers and suppliers alike,” said Erik Ragatz, Managing Director of Hellman & Friedman. “With a network of high quality independent operators and an outstanding base of employees, Grocery Outlet is very well positioned to continue on its growth trajectory. We look forward to partnering with Eric and MacGregor and the rest of the management team as the company moves into its next phase of growth.”
Hellman & Friedman invests from $200 million to $750 million in companies across a range of industries including energy & industrials, software, business & marketing services, internet & digital media, financial services, insurance, media, and healthcare. Founded in 1984, the firm has raised and managed over $25 billion of committed capital and invested in over 60 companies. The firm is currently investing its sixth fund, with $8.4 billion of capital commitments. Hellman & Friedman is based in San Francisco with additional offices in London and New York (www.hf.com).
“We are proud to have been part of Grocery Outlet’s successful growth over the past five years. During our partnership, we worked closely with Grocery Outlet’s exceptional management team to enhance the company’s capabilities and to grow the company’s store base. We look forward to seeing the next stage of the company’s development,” said Chris Hadley, Managing Director of Berkshire Partners.
Berkshire Partners invests from $50 million to $500 million of equity capital in mid-sized companies operating in the consumer products, retail, business services, industrial manufacturing, transportation and communications sectors. The firm is currently investing from Berkshire Fund VIII, a $4.5 billion fund raised in 2011. Berkshire Partners was founded in 1986 and is based in Boston (www.berkshirepartners.com).
Barclays and Goldman, Sachs & Co. served as financial advisors to Grocery Outlet in connection with the transaction. Morgan Stanley & Co. and Deutsche Bank Securities served as financial advisors to Hellman & Friedman.
2014 PEPD • Private Equity’s Leading News Magazine • 9-17-14
