with Henry's, Creating Leading Farmers Market
February 16, Phoenix, AZ —
Sprouts Farmers Market ("Sprouts") and Henry's Farmers Market ("Henry's"), two companies originally founded by the Boney Family that have operated under separate owners for almost a decade, announced the execution of definitive agreements to combine operations under the majority ownership and sponsorship of Apollo Management, L.P., one of the world's leading private equity firms.
The combined company will operate under the Sprouts Farmers Market name and will be one of the largest players in the exciting, fast-growing "farmers market" specialty segment of the retail food industry, as well as one of the largest grocers in the Western U.S. with annual revenues in excess of $1 billion. The transaction is expected to close early in the second quarter 2011.
The combined company will be managed from an operating perspective by the Boney family and will eventually operate all stores under the single name Sprouts Farmers Market. The new company will have 98 stores and more than 7,000 employees at the time the transaction is closed. The combined company plans to open up to 10 additional new stores during 2011.
Andrew S. Jhawar, a Senior Partner at Apollo and Co-Head of Apollo's Consumer and Retail Industry Group said, "We are very excited about partnering with Stan Boney, Shon Boney, Doug Sanders and the thousands of employees at Sprouts and Henry's to help reunite these two great companies under the Boney family's leadership. After the combination, Sprouts will be one of the largest, growth oriented specialty retailers in the U.S. with a focus on natural and organic products. Apollo looks forward to supporting the management team's vision for significant future new store growth across the country."
Stan Boney, Chairman of the Board at Sprouts said, "The combination of Sprouts and Henry's is an exciting chapter in our family's lives, and we look forward to continuing to deliver on our mission of helping America eat healthier, live longer and spend less. Apollo is one of the most experienced and successful private equity firms in the nation and we are excited about their support for our business model and look forward to working together with Andy and his team."
The combination of the Sprouts and Henry's businesses will occur through an equity investment and recapitalization of the existing Sprouts business by Apollo. A concurrent purchase of the Henry's business will be made from Commerce, California based Smart & Final Holdings Corp., an Apollo portfolio company since 2007. Following the transaction, Apollo will be the majority owner of Sprouts and will continue to be the principal equity owner of Smart & Final Holdings.
As closely held companies, neither Sprouts nor Henry's discloses financial information. Terms of the transaction weren't disclosed.
Roots in San Diego
The namesake of the Henry's stores was Henry Boney, a San Diego entrepreneur who opened his first business, a fruit stand at the corner of 70th and University in San Diego, in 1943. Over the years, he and his family started and sold many retail businesses, including Speedee Mart, Boney's and Windmill Farms. Mr. Boney was also well known in San Diego political and charitable circles and served on the San Diego County Board of Supervisors.
The second generation of Boney's stores were opened in 1969 by Henry's sons, Stan and Scott. The name was changed to Henry's Marketplace in 1997. The Boney family ran Henry's until 1999, when the stores were sold to Wild Oats Markets, Inc. In 2007, Whole Foods Market, Inc. purchased Wild Oats and sold the Henry's stores to Smart & Final Holdings Corp., which operates 290 stores under four store banners in the western U.S. Currently, Henry's operates 43 total store locations, comprised of 34 stores in California and 9 stores in Texas (operating under the Sun Harvest banner).
Henry's son, Stan, and his grandson, Shon, along with other family friends, returned to the natural foods business in 2002 when they opened the first Sprouts Farmers Market store in Chandler, Arizona. Sprouts has grown rapidly since, with 55 stores across Arizona, California, Colorado and Texas. Sprouts was named the Western Retailer of the Year in 2010 by Gourmet News magazine.
The stores share more in common than their lineage. Both Henry's and Sprouts are farmers market style grocery stores, with an informal, wide-open store design and a strong emphasis on fresh, high quality produce at a great value. Averaging about 26,000 square feet in size, the stores are easy to shop and navigate yet still have extensive offerings in virtually every major category (produce, grocery, dairy, frozen, meat, seafood, bakery, deli, bulk, vitamins, body care, household products, beer and wine) — largely natural and organic. All of these elements have been hallmarks of the Boney Family's retail establishments since the very beginning.
"For all the businesses he built during his career, my father would marvel at the efficiency with which we bring produce and natural foods to so many customers today and at such a good value," added Stan Boney. "And now, by reuniting these stores that he inspired, we're going to become even better at it."
Apollo Management, L.P. and its subsidiaries are affiliates of Apollo Global Management, LLC (together with its subsidiaries, "Apollo Global Management"), a leading global alternative asset manager. Apollo reported $57.8 billion in assets under management as of September 30, 2010. Apollo's investments in retail and consumer-oriented businesses have included Smart & Final, Claire's Stores, CKE Restaurants, General Nutrition Centers, AMC Entertainment, Rent-A-Center, Ralphs Grocery Company, Dominick's Supermarkets, Zale Corporation and Proffitt's Department Stores.
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