Specialty grocer The Fresh Market has agreed to be acquired by private equity firm Apollo Global for roughly $1.36 billion.
The Greensboro, North Carolina–based supermarket chain began exploring the possibility of a sale last fall when it retained investment bank JP Morgan Chase to review strategic options. At one point, the company's founder Ray Berry considered taking the retailer private. Kroger was also rumored to have an interest in the specialty foods chain.
"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," said Andrew Jhawar, senior partner and head of the retail and consumer group at Apollo. "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."
Founders Ray and Brett Barry collectively own 9.8 percent of the company and have agreed not to sell their shares, but will instead roll over most of their holdings.
The $28.50 per share all-cash offer by the Apollo Funds represents a premium of approximately 24 percent over The Fresh Market's closing share price on March 11, and a premium of approximately 53 percent over the February 10 closing share price, the day prior to press speculation regarding a potential transaction, according to the company
But already there are allegations that Apollo has paid too little, or too much, for the company. A shareholder alert noted that one Wall Street analyst has a $44 price target on the stock.
This isn't Apollo's first food retail acquisition. Jhawar noted the group has executed transactions in several retail and consumer brands including Sprouts Farmers Market, Smart & Final, Hostess Brands and General Nutrition Centers.
-See this Apollo Group press release
-See this shareholder alert
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