Kevin Dowd March 16, 2016
Apollo Global Management has entered into a definitive agreement to acquire specialty grocery retailer The Fresh Market (NASDAQ: TFM) for about $1.36 billion in cash. The purchase price of $28.50 per share represents approximate premiums of 24% over The Fresh Market’s closing share price on March 11 and 53% over its price on February 10, the day before speculation about a potential transaction began.
Company co-founder Ray Berry and son Brett Berry collectively own about 9.8% of The Fresh Market and will roll over most of those holdings in the deal. In addition to that rollover, the acquisition will be financed by roughly $525 million in equity from Apollo and around $800 million in debt. The transaction has been approved by the company’s Board of Directors.
It’s been a busy past few days for PE in the grocery retail sector. Last Friday, Haggen agreed to sell 29 of its core stores in the northwest U.S. to Cerberus Capital Management-backed Albertsons for a reported $106 million, the latest development in the ill-fated chain’s ongoing saga. Just last year, Haggen started a takeover of nearly 150 stores on the West Coast previously operated by Albertsons or Safeway, an antitrust move required by the Federal Trade Commission as a condition of the two giants' $9 billion merger. Months later, though, Haggen filed for bankruptcy and began pursuing options to offload locations in order to appease creditors.
While Apollo’s purchase of The Fresh Market isn’t expected to close until 2Q, 18 PE deals have already been completed this year in the U.S. retail sector, according to the PitchBook Platform. That figure is right on track with numbers from last year when 87 deals closed, up 24% from 2013.