The Fresh Market Swallowed by Private Equity Firm Apollo
15 Mar 2016 --- Private equity company Apollo has agreed to pay $1.36 billion to acquire US grocery chain The Fresh Market. The Fresh Market has over 180 stores across 27 states in the US and its design is based on European-style markets.
It sells higher-end produce, such as imported cheeses and organic produce, and competes against Whole Foods in the US.
The Fresh Market said it was looking for a buyer in October last year, when reports emerged that a number of private equity firms, including Apollo were circling the business.
Shares in The Fresh Market rose over 20 percent following the news that it was being bought.
The offer from Apollo of $28.50 a share is a 24 percent premium on the price of The Fresh Market last week.
However, the value of The Fresh Market has lost around a third in value over the past 12 months.
The Fresh Market’s board said it had unanimously approved the deal.
The founders of the grocery chain Ray Berry and his son Brett Berry, which own 9.8 percent of the business, have agreed to stay on after the purchase.
Apollo has experience in managing retail brands. Its previous acquisitions include food supplier Smart & Final, Sprouts Farmers Market and the bakers Hostess Brands.
Richard Noll, The Fresh Market’s lead independent director, said: “We are pleased to have reached this agreement with Apollo, which follows a comprehensive review of strategic and financial alternatives that generated interest from numerous parties.“
“After an open and thorough process, our board concluded that this offer maximizes value for our stockholders.”
Rick Anicetti, The Fresh Market’s president and chief executive, said: “We are excited about this transaction with Apollo, which recognizes the value of The Fresh Market’s strong brand and significant growth prospects while providing stockholders with an immediate and substantial premium.”
“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.”
Andrew S. Jhawar, senior partner at Apollo, said: “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.”
“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."
