Reuters reports that private equity group Apollo Global Management is acquiring Smart & Final Stores for $1.1 billion, making it the second time that it has owned the Southern California-based retailer.
The story points out that “the deal comes after Apollo sold Smart & Final to Ares Management Corp, another buyout firm, in 2012 for $975 million, including debt. It is Apollo's latest bet on the brick-and-mortar grocery sector, even after its last acquisition in the space, its $1.4 billion leveraged buyout of Fresh Market Inc in 2016, has soured amid increasing competition.”
Smart & Final, which operates more than 300 stores in the western US, went public in 2012 while it was owned by Ares “at a price of $12 per share,” Reuters writes. “The shares have lost close to half their value since then, as the company struggled in a tough environment for brick-and-mortar retailers. Ares now owns close to 60 percent of the company.”
The story points out that “the deal comes after Apollo sold Smart & Final to Ares Management Corp, another buyout firm, in 2012 for $975 million, including debt. It is Apollo's latest bet on the brick-and-mortar grocery sector, even after its last acquisition in the space, its $1.4 billion leveraged buyout of Fresh Market Inc in 2016, has soured amid increasing competition.”
Smart & Final, which operates more than 300 stores in the western US, went public in 2012 while it was owned by Ares “at a price of $12 per share,” Reuters writes. “The shares have lost close to half their value since then, as the company struggled in a tough environment for brick-and-mortar retailers. Ares now owns close to 60 percent of the company.”
- KC's View:
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I’ve always been a big fan of the Smart & Final business model, and am not quite sure why its differentiated approach to retailing has not been able to break through the retail clutter to a greater extent.
The question is whether its story simply is resonating with customers, or just not being told effectively enough. Hopefully Apollo will provide it with the resources to answer this question effectively.
