Smart & Final is back under the discretion of Apollo Global Management, which owned the retailer back in 2007 to 2012. This week, Smart & Final entered into a definitive merger agreement with certain investment funds managed by affiliates of Apollo Global Management.
"This transaction is a testament to the strength of Smart & Final's franchise, the quality of our store banners, and the talent and expertise of our people. Under the ownership of the Apollo Funds, Smart & Final will benefit from Apollo's strategic guidance, which will help us accelerate our existing strategy in a dynamic industry environment,” David Hirz, Smart & Final's Chief Executive Officer, said. “We are excited about the future as we embark on a new chapter in our almost 150-year history, with a strategic partner that understands our strengths, culture, and customer-centric philosophy. We would like to thank Ares Management for its partnership and support in helping us grow our business to where we are today."
As part of the transaction, the investment manager acquired all the outstanding shares of Smart & Final’s common stock for $6.50 per share in cash, which amounts to $1.12 billion in total.
"This transaction is the result of diligent analysis and thoughtful strategic deliberations by our Board of Directors over many months,” said Kenneth Tuchman, Chairman of the Strategic Review Committee of Smart & Final's Board of Directors. “Our Board, with the assistance of independent financial and legal advisors, determined that this transaction, upon closing, will deliver immediate, significant and certain cash value to our stockholders."
In November of 2012, Ares Management bought Smart & Final from funds managed by affiliates of Apollo. This week, Apollo bought back the retailer.
"We are pleased to fully support this transaction and we would like to thank the Smart & Final management team for its strong commitment and execution over the past seven years. We wish the management team and employees continued success under new ownership," said David Kaplan, Smart & Final's Chairman of the Board and Co-Founder of Ares Management.
According to a press release, the purchase price represents a premium of approximately 25 percent over Smart & Final's average closing share price over the past 24 trading days since the company's earnings announcement on March 13, 2019.
"We are very excited for our funds to be re-acquiring Smart & Final and expect to leverage Apollo's deep expertise and history of success in food retail to support the company as it embarks on its next chapter,” said Andrew Jhawar, Senior Partner and Head of the Consumer and Retail Group at Apollo. “The unique differentiation and strong value proposition of both the Smart & Final and Smart Foodservice banners are evident to us and we welcome the opportunity to augment and enhance the experience for the company's household and business customers. We look forward to working with the management team as well as the over 12,000 team members to capitalize on the company's position in the marketplace."
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