GREENSBORO, N.C. -- Apollo Global Management LLC has entered into an agreement to acquire small-format specialty grocery retailer The Fresh Market for approximately $1.36 billion.
After an “open and thorough” review of strategic alternatives, The Fresh Market board unanimously approved the deal, with chairman and founder Ray Berry recusing himself. Ray Berry and Brett Berry, who together own approximately 9.8% of The Fresh Market’s outstanding shares, have agreed not to tender their shares into the tender offer and will both participate and roll over most of their holdings in the transaction.
George Golleher, with whom Apollo has had a long-term operating partner consulting relationship and who was formerly CEO of Smart & Final and Ralphs Grocery Co./Food-4-Less during ownership by other Apollo affiliated funds, will be a co-investor with the Apollo funds in the transaction.
The deal “recognizes the value of The Fresh Market’s strong brand and significant growth prospects,” said Rick Anicetti, The Fresh Market’s president and CEO. “Apollo is a highly regarded investor, bringing deep industry expertise and financial resources.”
Andrew S. Jhawar, senior partner and head of the retail and consumer group for Apollo, said The Fresh Market “was one of the early pioneers in small-box grocery, offering unique, delicious and healthy food with a keen focus on perishables.”
He continued, “We believe there is a significant opportunity to enhance the brand, merchandise offering and price-value combination to make The Fresh Market a primary destination for food shoppers, while at the same time being committed to social responsibility through partnerships with local vendors and communities.
“Our team at Apollo has had the tremendous fortune of having executed transactions in several consumables retailers and brands--such as Sprouts Farmers Market, Smart & Final, Hostess Brands and General Nutrition Centers, among others--that have undergone significant transformations under our strategic guidance, and we intend to bring that experience to bear at The Fresh Market.”
The transaction, which is expected to close in second-quarter 2016, is subject to customary closing conditions.
Under the terms of the transaction, the company may actively solicit alternative acquisition proposals during a 21-day period following the execution date of the agreement, continuing until midnight April 1, 2016. There can be no assurances that this process will result in a superior proposal, the company said.
New York-based Apollo is a leading global alternative investment manager with approximately $170 billion in assets under management in private equity, credit and real-estate funds invested across a core group of nine industries in which Apollo has considerable knowledge and resources.
Founded by Ray Berry in 1982, The Fresh Market operates 186 stores in 27 states.
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