Albertsons, through its Acme Markets division on the east coast, has won the bidding process to acquire Kings Food Markets and Balducci's Food Lover's Market for $96.4 million, giving it 27 fresh food-centric stores in the mid-Atlantic region.
KB Holdings, owner of Kings and Balducci's, filed for bankruptcy several months ago and put the company on the sales block.
The deal is subject to regulatory approvals. The announcement says that "both Kings Food Markets and Balducci's Food Lover's Market will continue to serve their communities under their own banners through and after the closing of the sale."
Albertsons already operates on the east coast under banners that include Safeway, Acme, and Star Markets.
BoiseDev quotes Albertsons Companies’ Mid-Atlantic President Jim Perkins as saying, "Our company has a history of managing small, differentiated chains that offer an elevated experience, like Andronicos and Haggens in the western U.S. When we leverage their team’s expertise and continue to deliver what their customers want, these stores can thrive. We are excited to add these two premium, gourmet banners to our east coast operations.”
Scott Moses of PJ Solomon served as investment banker to KB US Holdings.
- KC's View:
The previous move by Albertsons that this most reminds me of is the Haggen acquisition of several years ago that, while done under very different circumstances, brought another fresh food-oriented company under the Albertsons aegis. (This has been a very successful acquisition…which doesn't surprise me, since Haggen also was advised by my friend Scott Moses.)
I do think that this is a good move for both sides - ideally, it will give Kings and Balducci's the operating capital and infrastructure to be more aggressive and competitive in their markets, while putting another arrow in the Albertsons quiver. I have to wonder if there could be some Acme locations that could be converted to either the Kings or Balducci's banner and be even more effective; I'm thinking specifically of New Canaan, Connecticut, where a strong Kings store would be welcomed by a lot of the folks I know there.
One thought, though. Over the years, I've been told by folks at Star Markets that they sometimes feel like poor stepchildren, and that they don't feel they get the kind of support and love that other banners in the Albertsons family receive. I hope that these new arrivals don't get all the love … and that Star Markets gets the kind of greater support that some of their folks think they deserve.