Private equity firm to invest $1.75 billion in retailer
BOISE, Idaho — Albertsons Cos. plans to sell a 17.5% stake to the private equity firm Apollo Global Management for $1.75 billion.
The deal, announced Wednesday, is expected to close by June 15.
“Albertsons Companies is pleased to work with Apollo and its co-investors,” Albertsons president and CEO Vivek Sankaran said in a statement. “Apollo knows our industry and business model well, given its significant prior history of successful investments in the grocery sector. We believe the investment led by the Apollo Funds represents a vote of confidence in both our business and our long-term strategy.
“We are also proud to have the continued support of our owners, a consortium led by Cerberus Capital Management, L.P., which also includes Kimco Realty Corp., Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation. We appreciate their tremendous support over the years in operations, technology and financing as we have grown our business and our platform, and especially during the COVID-19 pandemic as we focus on the safety and well-being of our associates, customers and communities.”
Apollo acquired Smart & Final for $1.1 billion in a deal announced last April. The private equity firm also acquired the Fresh Market for about $1.3 billion in 2016, and it previously had a controlling interest in Sprouts Farmers Market, which it later sold off prior to that chain’s going public in 2013.
“We are excited to work with the strong management team at Albertsons Companies,” said Justin Korval, a partner in Apollo’s Hybrid Value Business, “and we believe the business has compelling growth opportunities ahead via e-commerce penetration, expansion of the company’s innovative Own Brands portfolio, and merchandising and marketing initiatives. This investment, led by our Hybrid Value team in partnership with our Credit platform, marks the third sizable transaction in the last month and exemplifies the breadth of Apollo’s capabilities and the creative capital solutions we can deliver to great companies.”
Apollo’s investment in Albertsons Cos. comes a little more than two months after the retailer filed for an initial public offering.