USA – Global alternative investment manager, Apollo Global Management has made a US$1.75 billion equity investment in Idoha-based retailer, Albertsons Companies which represents acquisition of approximately 17% stake.
The transaction was led by Apollo’s Hybrid Value business in partnership with the Credit platform and is expected to close by June 15, 2020, subject to customary closing conditions.
“Albertsons Companies is pleased to work with Apollo and its co-investors. Apollo knows our industry and business model well, given its significant prior history of successful investments in the grocery sector,” said Vivek Sankaran, President and Chief Executive Officer of Albertsons Companies.
Vivek said that the investment led by the Apollo Funds, represents a vote of confidence in both Albertsons business and its long-term strategy. Albertsons Companies is one of the largest retailers in the United States, with both a strong local presence and national scale.
Albertsons operates stores across 34 states and the District of Columbia under 20 banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs.
“We are also proud to have the continued support of our owners, led by Cerberus Capital Management. 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,” Vivek said.
Justin Korval, Partner in Apollo’s Hybrid Value Business, said, “We are excited to work with the strong management team at Albertsons Companies, and believe the business has compelling growth opportunities ahead via eCommerce 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 Co-Presidents Scott Kleinman and Jim Zelter addded, “We believe the Albertsons investment showcases the benefits of Apollo’s integrated platform and our ability to leverage capital and knowledge across the Firm.
“With expertise in the grocery sector, flexible strategies and an integrated operating model, the Hybrid Value and Credit teams were able to jointly lead one of the largest private preferred investments made in recent years.”
Apollo’s current grocery retail investments include The Fresh Market, which the private equity firm acquired for US$1.36 billion in 2016, and Smart & Final, acquired in a US$1.12 billion buyout that closed last June.
Apollo also had been the controlling owner of Sprouts Farmers Market but sold off its remaining shares in the specialty grocer in 2015 after the chain went public in 2013.