- The Fresh Market is a premium specialty grocer offering a
variety of high-quality fresh products and a curated in-store meal
offering.
- Overall total enterprise valuation of US $1.568 billion, equivalent to an 8.0x 2021
Adjusted EBITDA Multiple.
- Cencosud will invest cash of US $676
million for a 67% ownership stake.
GREENSBORO, N.C., May 11, 2022
/PRNewswire/ -- The Fresh Market Holdings, Inc. ('The Fresh Market'
or the "Company"), a premium specialty retailer competing in the
food retail industry in the US, today announced that leading South
American retailer Cencosud (BCS: CENCOSUD) has entered a definitive
agreement with funds managed by Apollo (NYSE: APO) to acquire a 67%
stake in The Fresh Market. Existing Company shareholders, including
the Apollo Funds, the Berry family, and Company management, will
retain a minority equity interest in The Fresh Market.
The Fresh Market is a supermarket chain founded in 1982, with
headquarters in Greensboro, North
Carolina. The Company has 160 stores (100% leased) across 22
states, with an average store size of approximately 21,000 square
feet. (equivalent to 1,950 sqm).
The Fresh Market has always been committed to its original
values of providing guests with inspiring, fresh food to make
everyday eating extraordinary. The Company is a destination for
those looking to discover the best and most unique products
including convenient, restaurant-quality meals, hand-picked
produce, premium baked goods, fresh-cut flowers, custom-cut meats
and carefully curated offerings for holidays and special
occasions.
Awards and Recognition:
- The Fresh Market has been recognized in USA Today's 10 Best
Readers' Choice polls in 2021 and 2022 as the #1 best supermarket
in the United States.
- Newsweek and Statista have rated The Fresh Market as the #5 for
best guest services in grocery in America in 2020.
- Winsight Grocery Business has ranked The Fresh Market as one of
the top ten innovators in the food retail sector.
- Newsweek has also ranked The Fresh Market as a top five most
trusted grocery retailer in gourmet foods and natural organic
foods.
With this transaction, Cencosud expands its geographic
diversification with approximately 12% of pro forma revenues coming
from the United States, a
traditionally defensive market with a stable currency. This
partnership also provides Cencosud with access to the US markets
where there is a much greater depth of capital markets
alternatives. In addition, Cencosud will be able to leverage best
practices across its Latin American businesses to The Fresh Market,
and accordingly incorporate best practices from The Fresh Market to
its existing portfolio, helping to drive increased performance and
efficiencies. The Fresh Market's Board of Directors (which Cencosud
will have majority representation on) and its existing management
team have vast experience in the American retail industry, and
management will continue to operate the business and the existing
shareholders will retain an equity stake in the Company, thereby
contributing to the continued success of The Fresh Market and its
strong corporate governance.
The Fresh Market reported revenue of US $1,933 million in 2021 with an adjusted EBITDA of
US $196 million and EBITDA margin of
10.2%. Sales consisted of ~70% perishables (vs. 35% in traditional
supermarkets), with the fresh-focused offering helping to drive
strong EBITDA margin performance and ~15% prepared foods, which is
a key driver of growth and profitability.
Transaction Agreement:
Cencosud has agreed to invest
US $676 million to purchase a combination of primary and
secondary equity in The Fresh Market. As a result of the
transaction, Cencosud will acquire a 67% stake in The Fresh Market,
with the current shareholders owning the remaining 33%. The primary
cash component of US $265 million
will strengthen the balance sheet of The Fresh Market, reducing the
Company's net leverage to 2.7x EBITDA.
Cencosud will finance the investment primarily through cash on
its balance sheet. Post-closing, Cencosud's gross leverage will be
approximately 3.1x and The Fresh Market's debt will be refinanced
to improve its capital structure from an extended maturity and
interest rate perspective.
Heike Paulmann, Chairwoman of the
Cencosud board said, "Great step for Cencosud to enter the United States, in accordance with our
diversification strategy. I am very sure that it will be a
tremendous experience and very profitable for both companies. Let´s
go The Fresh Market! Come on Cencosud!"
Matias Videla, Chief Executive
Officer of Cencosud mentioned, "The Fresh Market is one of the best
supermarkets in the USA. Widely
recognized by market specialists and customers alike for its
customer-centric culture, excellence in fresh produce and memorable
shopping experience in its stores. This unique value proposition is
a result of the successful strategy executed and the commitment of
a team of highly experienced executives led by Jason and Andy. We
are very pleased to make our first investment in the American
market through a partnership of the prestige of Apollo Global
Management with extensive experience in the retail market. Our team
is very excited to start working together to accelerate the growth
and value of the company"
Apollo Partner Andrew Jhawar,
commented, "The Fresh Market has experienced best-in-class sales
growth over the last two years, and we are very excited to enter
its next phase alongside Cencosud, one of the best retailers in
South America. Looking ahead, the
Company has a tremendous new store growth opportunity that
Cencosud's investment can accelerate, and we look forward to
working closely with Heike, Matias and the Cencosud team in helping
to drive continued value creation at The Fresh Market."
Jason Potter, Chief Executive
Officer of The Fresh Market, added, "Cencosud has demonstrated that
it is a world-class retailer with exceptional margins, and we look
forward to sharing best practices across our businesses. The Fresh
Market has experienced strong financial momentum over the last few
years and this partnership with Cencosud will allow the company to
further capture market share as we expand our footprint in our core
Southeast market and beyond. Our entire team looks forward to the
partnership with the Paulmann Family, Matias and the team at
Cencosud."
About THE FRESH MARKET
Voted as the "Best Supermarket
in America" by USA Today's 10 Best
Readers' Choice Awards 2022 and 2021, "America's Best Customer
Service 2021" by Newsweek and Statista and a top 5 most trusted
grocery retail brand for specialty and natural/organic foods in the
2022 BrandSpark Most Trusted Awards, The Fresh Market helps guests
discover the best with time-saving meal solutions, unique
ingredients, and delicious food for any occasion. From fresh
produce and exceptional meat and seafood to signature baked goods
and thousands of organic options, the specialty grocer has
something to please every palate. The Fresh Market currently
operates 160 stores in 22 states across the U.S., inspiring guests
to discover new flavors and cook with confidence. For more
information, please visit www.thefreshmarket.com or follow the
company on Facebook, Twitter, Instagram and
Pinterest.
About Cencosud:
Cencosud is one of the largest and
most prestigious multi-brand retail conglomerates in Latin America, with operations in Argentina, Brazil, Chile, Peru
and Colombia. The group operates a
diversified portfolio of retail segments including 915
supermarkets, 108 home improvement and construction stores, 49
department stores, and 67 shopping centers and malls. Cencosud was
founded in 1976 with the first Jumbo supermarket in Chile and now employs more than 115,000
collaborators. Since 2004, the group has been actively trading on
the Santiago Stock Exchange (SNSE:CENCOSUD).
About Apollo:
Apollo is a high-growth, global
alternative asset manager. In our asset management business, we
seek to provide our clients excess return at every point along the
risk-reward spectrum from investment grade to private equity with a
focus on three investing strategies: yield, hybrid, and equity. For
more than three decades, our investing expertise across our fully
integrated platform has served the financial return needs of our
clients and provided businesses with innovative capital solutions
for growth. Through Athene, our retirement services business, we
specialize in helping clients achieve financial security by
providing a suite of retirement savings products and acting as a
solutions provider to institutions. Our patient, creative, and
knowledgeable approach to investing aligns our clients, businesses
we invest in, our employees, and the communities we impact, to
expand opportunity and achieve positive outcomes. As of
March 31, 2022, Apollo had approximately $513 billion of assets under management. To learn
more, please visit www.apollo.com.
Advisors:
J.P. Morgan is acting as exclusive financial
advisor to Cencosud and Milbank LLP is serving as legal advisor.
Credit Suisse is serving as exclusive financial advisor to The
Fresh Market and Simpson Thacher & Bartlett LLP is serving as
legal advisor.
Media Contact:
Patrice
Molnar (patricemolnar@thefreshmarket.net)
Director Corporate Communications and Public Relations
View original content to download
multimedia:https://www.prnewswire.com/news-releases/cencosud-to-acquire-majority-stake-in-the-fresh-market-holdings-from-apollo-funds-301545267.html
SOURCE The Fresh Market, Inc.