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Smart & Final becomes private company

Warehouse-style grocer closes $1.12 billion buyout deal

Smart & Final Stores today completed a $1.12 billion deal to be acquired by private equity firm Apollo Global Management LLC.

With the transaction’s closing, Smart & Final became a private company and its shares ceased trading on the New York Stock Exchange under the symbol “SFS” effective June 20. Under the agreement, announced in mid-April after speculation that Smart & Final was on the selling block, Apollo purchased the warehouse-style grocery chain for $6.50 in cash per share of outstanding common stock.

“As we turn the page to the next chapter in our almost 150-year history, we are excited to again work with Apollo to capitalize on our unique value proposition in this dynamic grocery marketplace,” Smart & Final President and CEO David Hirz said in a statement. “We look forward to continued evolution in the Smart & Final and Smart Foodservice store banners, as we endeavor to provide the best shopping experience for our household and business customers across both in-store and digital sales channels.”

New York-based Apollo is a previous owner of Smart & Final. Before the transaction, Smart & Final was majority-owned by private equity firm Ares Management. Los Angeles-based Ares had acquired its majority stake in Smart & Final from Apollo in November 2012 for $975 million. About two years later, the retailer completed an initial public offering at $12 per share. Funds managed by affiliates of Apollo had owned Smart & Final from 2007 through the sale of the ownership stake to Ares.

Smart & Final and Apollo haven’t announced leadership plans for the Commerce, Calif.-based grocery chain. For its 2018 fiscal year ended Dec. 30, Smart & Final saw net sales rise 3.7% to $4.74 billion, with same-store sales up 1.2%. The company reported a net loss of $112.2 million, or $1.54 per diluted share, down from a net loss of $138.9 million, or $1.92 per diluted share, in 2017.

Currently, Smart & Final operates 324 stores, including 257 Smart & Final Extra! and legacy Smart & Final locations plus 67 Smart Foodservice Warehouse stores.

Smart & Final Extra! stores blend a wholesale club-style store — but no membership fee — with a traditional supermarket in a one-stop shop, including farm-fresh produce and natural/organic options. The Smart Foodservice stores, located in the Pacific Northwest and Northern California, offer a “no-frills” warehouse format that mainly targets business customers, such as restaurants, caterers and other foodservice businesses.

During fiscal 2019, Smart & Final plans to open one Smart & Final Extra! store and four Smart Foodservice Warehouse stores and to relocate one or two Smart & Final stores.

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