Funding agency Apollo World Administration plans to purchase Hispanic grocer Cardenas Markets and mix it with current acquisition Tony’s Recent Market to type an almost $2 billion, ethnic-focused grocery store operator.

Monetary phrases of the deal, introduced late yesterday, weren’t disclosed. Beneath the transaction, funds managed by Apollo associates have agreed to accumulate Cardenas from funding funds affiliated with international funding agency KKR, New York-based Apollo mentioned.

Plans name for Cardenas and Tony’s to proceed to function underneath their present manufacturers and native management. Apollo mentioned Cardenas Markets CEO Doug Sanders will stay in that function and function chief government of the mixed firm, whereas Frank Ingraffia will proceed to function the CEO of Tony’s Recent Market.

Tony’s Recent Market

Apollo unveiled its deal to accumulate Chicago-area specialty grocer Tony’s Recent Market in April.

Collectively, Cardenas and Tony’s generate income of about $1.8 billion from 78 shops in three Western states and the Chicago space, enabling them to learn from better scale and complementary capabilities in a bigger working footprint, Apollo famous.

“Cardenas has grown considerably over the past a number of years underneath Doug’s management, and we’re excited to speed up its development together with Tony’s on this subsequent part,” Andrew Jhawar and Joanna Reiss, companions at Apollo Personal Fairness, mentioned in a joint assertion. “We’re excited to as soon as once more companion with Doug following our extremely profitable funding in Sprouts Farmers Market, which Doug led as CEO underneath Apollo funds’ possession. Cardenas and Tony’s have strong positions within the ethnic grocer house and collectively can leverage greatest practices throughout their complementary go-to-market methods, merchandising, buyer loyalty applications and extra. This transaction will mix the very best of each retailers and supply better alternatives and scale for the respective manufacturers and groups as they proceed to carry high quality, reasonably priced groceries to various communities.”

Apollo introduced its acquisition of Itasca, Ailing.-based Tony’s Recent Market in April. Launched in 1979 by Italian immigrants Tony Ingraffia and Domenico Gambino, Tony’s operates 19 specialty grocery shops throughout the Chicago market and neighboring communities in Illinois and is thought for its large assortment of contemporary produce, ready meals and multicultural choices. Apollo reported that a number of extra shops at the moment are in growth. 

“Cardenas Markets shares comparable values as Tony’s, and I’m thrilled to mix forces with Doug and the Cardenas group to proceed to strengthen our operations and construct on our differentiated providing,” Tony’s Recent Market CEO Frank Ingraffia mentioned in a press release. “Our manufacturers have complementary strengths, and this partnership ought to give us extra instruments and experience to additional scale and serve our clients with contemporary, wholesome and reasonably priced meals.” 

Ontario, Calif.-based Cardenas at present operates 59 shops underneath the Cardenas Markets (51 places), Los Altos Ranch Markets (seven places) and Cardenas Ranch Markets (one location) banners in California, Nevada and Arizona. Based in 1981, the retailer is among the nation’s largest Hispanic grocery chains and sources merchandise from over 500 distributors.

Doug Sanders-CEO chairman-Cardenas Markets.jpgPlans name for Cardenas Chairman and CEO Doug Sanders to function chief government of the mixed firm. (Picture courtesy of Cardenas Markets)

And Cardenas’ retailer depend already is slated to develop even earlier than the Tony’s mixture. Final week, Cardenas unveiled a deal to accumulate fellow Latino grocer Rio Ranch Market, increasing its Southern California footprint. Primarily based in Fontana, Calif., Rio Ranch operates six supermarkets in San Bernardino, Riverside, Chino, Perris, Banning and Fontana in addition to a warehouse in San Bernardino. The transaction is anticipated to shut by mid-July.

“Since becoming a member of Cardenas, we’ve got made nice progress in rising and enhancing our operations with KKR’s help, and I’m thrilled by the chance for our group to now companion with Frank and the Tony’s group, leveraging our collective strengths. Collectively, as two of the highest-quality Hispanic and ethnic grocers, we are able to ship even better worth to the communities we serve,” commented Sanders, who additionally serves as Cardenas’ chairman.

“Apollo non-public fairness has an intensive best-in-class monitor document of success in meals retail, and I’m thrilled to companion with Andy Jhawar and the Apollo group once more on this thrilling subsequent chapter for Cardenas,” he added. “I might additionally prefer to thank KKR, which has been an amazing strategic companion over the previous six years, serving to us develop and professionalize the enterprise.”

New York-based KKR acquired Cardenas Markets from the Cardenas household in 2016. Apollo famous that, underneath KKR’s possession, Cardenas doubled in measurement through natural development and strategic acquisitions.

“We’re immensely appreciative of the whole lot Doug and the administration group have finished to construct an ideal firm devoted to bringing contemporary and reasonably priced groceries to the communities that it serves, in step with the values that the Cardenas household instilled within the enterprise,” acknowledged Vishal Patel, a managing director at KKR. “We’re assured that Apollo and Tony’s Recent Market are the correct companions for Cardenas because it enters its subsequent chapter of development.”

The transaction is anticipated to be finalized by the third quarter, pending customary closing circumstances, based on Apollo. Solomon Companions acted as lead monetary adviser to Cardenas and KKR. BMO Capital Markets additionally suggested, and Kirkland & Ellis LLP served as authorized adviser to Cardenas and KKR. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as authorized counsel to the Apollo funds.

“We couldn’t be extra pleased with what we’ve achieved collectively on this transaction with Cardenas’ extraordinary CEO Doug Sanders, KKR and the distinctive Cardenas group, whose over 5,700 workers have helped the corporate function a pillar of dozens of Latino communities within the Western U.S. for over 40 years, notably throughout the pandemic,” Scott Moses, managing director and head of grocery, pharmacy and eating places funding banking at New York-based Solomon Companions, advised Grocery store Information in an e-mail.

“I first met Doug practically 17 years in the past, when he was with Sprouts, which was at the moment a small, rising specialty grocer with only a few shops in Phoenix,” Moses mentioned. “We then labored collectively on Sprouts’ mergers with Henry’s and Sunflower in 2011 and 2012, respectively, to construct the muse from which Doug and Apollo then remodeled Sprouts right into a multibillion-dollar public firm, with a whole lot of shops and over 35,000 workers throughout the nation.”


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