grocery

The Fresh Market has agreed to be acquired by Apollo Global Management for $28.50 per share or approximately $1.36 billion. The transaction has fully committed financing in place and is expected to close by the end of the second quarter of 2016.

“We are delighted about this transaction with The Fresh Market, which was one of the early pioneers in small-box grocery, offering unique, delicious and healthy food with a keen focus on perishables,” said Andrew Jhawar, Senior Partner and Head of the Retail and Consumer Group at Apollo. The firm has been an active investor in several consumables retailers and brands such as Sprouts Farmers Market, Smart & Final, Hostess Brands and General Nutrition Centers.

The Fresh Market (NASDAQ:TFM) is a specialty grocery retailer with 186 stores in 27 states. The company focuses on perishable product categories such as meat, seafood, produce, deli, bakery, floral, sushi, and prepared foods; but also sells non-perishable products such as traditional grocery, frozen, and dairy products, as well as bulk, coffee and candy, beer and wine, and health and beauty products.  The company was founded in 1982 by Ray Berry and is headquartered in Greensboro, NC (www.thefreshmarket.com).

The transaction will be financed by a new $800 million senior secured facility and an equity contribution of approximately $525 million from funds managed by Apollo in addition to the equity rollover from Ray Berry and Brett Berry. The company will also enter into a new $100 million revolving credit facility at closing. The debt financing is being committed to by Barclays (www.barclays.co.uk), Royal Bank of Canada (www.rbccm.com), Jefferies Finance (www.jefferies.com), and Macquarie Capital (www.macquarie.com).

“We are excited about this transaction with Apollo, which recognizes the value of The Fresh Market’s brand and growth prospects while providing stockholders with an immediate and substantial premium,” said Rick Anicetti, The Fresh Market’s President and Chief Executive Officer. “Apollo is a highly-regarded investor, bringing deep industry expertise and financial resources, and we look forward to working with them to build on our progress in achieving our strategic plan to deliver long-term profitable growth.”

Apollo has total assets under management of $170 billion in private equity, credit and real estate funds invested across a core group of nine industries:  chemicals; commodities; consumer & retail; distribution & transportation; financial & business services; manufacturing & industrial; media, cable & leisure; packaging & materials; and satellite & wireless. The firm has offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai (www.agm.com).

George Golleher, an experienced food industry executive and a former CEO for a number of Apollo portfolio companies, will be a co-investor with Apollo in the transaction. Ray Berry and Brett Berry, who together own 9.8% of The Fresh Market’s outstanding shares, have agreed not to tender shares held by them into the tender offer and will both participate and rollover the vast majority of their holdings in the transaction with Apollo.

J.P. Morgan Securities (www.jpmorgansecurities.com) is serving as the exclusive financial advisor to The Fresh Market. Barclays, RBC Capital Markets, Jefferies, and Macquarie Capital are serving as financial advisors to Apollo.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-14-16

Audax Buys Astra Pacific Outdoor

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

TPG has completed its previously announced acquisition of Arden Group, the parent of Gelson’s Markets, an operator of specialty grocery stores. The transaction is valued at $394 million.

Gelson’s Markets operates 17 specialty grocery stores in Southern California. Products sold include produce, meat, seafood, deli, wine and liquor. The company was founded in 1951 and is headquartered in Encino, CA (www.gelsons.com).

“Gelson’s Markets is an iconic Southern California supermarket chain that prides itself on offering quality and unmatched customer service,” said Carrie Wheeler, partner at TPG. “We look forward to working with the team to further expand Gelson’s footprint of premier supermarkets.”

TPG is a private investment firm founded in 1992 with approximately $56 billion of assets under management. Sectors of interest include industrials, retail, consumer, financial services, travel and entertainment, technology, media and communications, and healthcare. TPG makes investments throughout North America, Europe, Asia and Australia. The firm has offices in San Francisco, Fort Worth, Austin, Beijing, Chongqing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, Paris, São Paulo, Shanghai, Singapore and Tokyo (www.tpg.com).

“With TPG’s retail experience and financial support, we are confident that we can profitably grow Gelson’s, and we are excited to embark on this new phase for the company,” said Rob McDougall, President and CEO of Gelson’s Markets. “In fact, we will be opening our first new store under TPG’s ownership in La Cañada Flintridge at the end of March. We hope this will be the first of many new store openings to come in the future, expanding Gelson’s legacy of providing quality service and products.”

Moelis & Company was the exclusive financial advisor to Arden Group. BMO Capital Markets acted as financial advisor to TPG.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-20-14

HGGC has completed a growth equity investment in MyWebGrocer, a provider of digital marketing services to grocery stores and consumer packaged goods companies. The Stripes Group, a minority investor in MyWebGrocer since August 2009, sold its stake in the company as a part of this transaction.

“We have always worked with investors who bring more than capital—people who are true partners that value what we have built and want to work alongside us to accelerate our growth and realize the tremendous potential of MyWebGrocer,” said Rich Tarrant, a Founder and the CEO of MyWebGrocer. “HGGC’s unique insights, proven track record with technology‐enabled services businesses, and experience with founder‐owned businesses make them the clear choice.”

MyWebGrocer provides a suite of eCommerce and eMarketing services to the grocery and consumer packaged goods industries. As part of its platform, MyWebGrocer operates the nation’s largest grocery ad network with over 10 million monthly unique visitors. MyWebGrocer provides a software platform that allows consumers to plan grocery visits online, including making shopping lists, downloading coupons, and viewing digital circulars that outline promotional items. MyWebGrocer’s software also allows grocery stores to support online transactions for in‐store pick‐up or home delivery. For consumer packaged goods (CPG) companies, MyWebGrocer provides the ability to run digital marketing campaigns on grocery websites, and helps them manage digital display and search advertising campaigns through proprietary consumer data. The company’s customers include more than 140 grocery brands, including some of the largest retailers, such as Kroger, Shoprite, and Albertsons, as well as more than 200 consumer packaged goods brands including McCormick, Kelloggs, Unilever, Nestle and P&G. MyWebGrocer, which employs 180 people, is profitable and saw 2012 revenues increase nearly 60 percent over 2011. The company is headquartered in Winooski, VT (www.mywebgrocer.com).

“Changing consumer behavior is pressuring grocers and CPGs to adopt digital solutions, and MyWebGrocer is the clear vertical market leader,” said Hudson Smith, Principal at HGGC.  “With new eCommerce‐focused entrants seeking to take share from traditional grocers, we believe that grocers will increasingly look to MyWebGrocer to provide the technology platform that enables consumers to plan and shop online, as well as enhance the in‐store experience with mobile and social offerings.”

HGGC (formerly Huntsman Gay Global Capital) makes leveraged buyout, recapitalizations and growth equity investments in middle market companies. The firm invests from $25 million to $100 million in equity per transaction in companies that have revenues of $100 million or more, enterprise values of $100 million to $500 million, and EBITDA of $15 million or more. The firm’s sweet spot is companies with $20 million to $40 million of EBITDA. HGGC is based in Palo Alto (www.hggc.com).

“This investment is further proof of HGGC’s unique ability to partner with strong management teams and founders who want to continue to invest in and grow their businesses, as well as our expertise in technology‐enabled services businesses,” said Richard Lawson, Co‐Founder and Managing Partner at HGGC. “We look forward to supporting Rich Tarrant, his brothers, Jerry and Brian who co‐founded the business, and the MyWebGrocer management team to continue to build upon the foundation of success.”

Stripes Group is a growth equity firm that makes minority and majority equity investments of $10 million to $100 million in B2B/B2C Internet, SaaS, software, healthcare IT, and branded consumer products businesses. The firm is based in New York (www.stripesgroup.com).

The Jordan, Edmiston Group (www.jegi.com), a New York-based investment bank that specializes in the media, information, marketing services and technology industries, served as exclusive financial advisor to MyWebGrocer and the Stripes Group.

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-12-13

AUA Private Equity Partners has completed a recapitalization of Associated Foods Holdings in partnership with the company’s owners, Harry Laufer and Ira Gober. Messrs. Laufer and Gober, Associated’s co-Chief Executive Officers, will continue to lead the company through its next stage of growth with AUA Equity.

“We are pleased to partner with Harry Laufer and Ira Gober who are true icons in the New York City supermarket industry. Associated has an outstanding business model and Harry and Ira have done a tremendous job building the company over the past thirty years. We look forward to partnering with them to help grow the company and increase its profitability,” said Andy Unanue, Managing Partner of AUA Equity.

Associated is a specialty distributor of grocery products to branded independent (predominately Hispanic owned) retail supermarkets in the New York metropolitan area. Associated provides grocery distribution, financing, marketing and promotional services to approximately 250 independently owned and operated grocery stores, which typically carry the “Associated” or “Compare” trade name. The company was founded in 1954 and is based in Hewlett, NY (www.associatedsupermarkets.com).

“This is a quintessential investment that fits squarely within AUA Equity’s wheelhouse – a Hispanic-oriented and family-owned business. Our investment team’s complementary skill set and appreciation, understanding, and know-how of the industry allowed us to successfully consummate this recapitalization. I am proud to be connected to a company that has done so much for the New York City Hispanic supermarket community,” said Mr. Unanue.

In addition to Mr. Unanue, the AUA Equity deal team was led by Partners Steven Flyer and David Benyaminy, Vice Presidents Kyce Chihi and Nancy Rocha and Associate Jack Lin.

AUA Equity’s strategic partnership with Associated’s owners and management team will allow the company to accelerate its growth by adding new stores to its existing network and increase its financing capacity to its customers for remodeling and expansion.

“Over the past few years we have been thinking about bringing in a strategic investor and I believe that we have now found the right partner to help accelerate our growth plans. We are excited to be in partnership with the AUA Equity team. They understand our Hispanic customer base and their collaborative approach has shown me that they will add true value,” said Ira Gober.

“We have known Andy and his father Joe for many years and we believe that Andy’s experience in the Hispanic market will allow Associated to continue to successfully expand our presence in New York City and other markets,” said Harry Laufer.

AUA Private Equity Partners makes equity investments in companies in the consumer, media and business services sectors with a particular focus on Hispanic-oriented companies and family-owned businesses located in the United States. The firm invests from $10 million to $30 million of equity in companies that generate $3 million to $15 million in EBITDA. AUA Equity makes control and significant minority investments in a variety of transactions and structures including: traditional leveraged buyouts; growth equity; recapitalizations; and roll-up strategies. The firm is based in New York (www.auaequity.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13