Sprouts Farmers Market Announces Merger with Sunflower Farmers Market
Sprouts Farmers Market Announces Definitive Agreement to Merge With Sunflower Farmers Market – Merger Will Accelerate Growth, Optimize Offerings and Enhance Value for Customers
March 9, 2012
Phoenix, AZ – Sprouts Farmers Market (“Sprouts”) and Sunflower Farmers Market (“Sunflower”), two independent natural food store chains, announced today the execution of a definitive agreement to merge. The combined company will operate 139 stores under the Sprouts Farmers Market name and will have approximately 10,000 employees. The transaction is expected to close in the second quarter of 2012.
The addition of Sunflower’s 35 stores expands Sprouts’ geographic footprint to Nevada, Utah, New Mexico and Oklahoma and further extends its presence in California, Arizona, Colorado and Texas. Overall, the combined company plans to open up to 13 new stores during 2012. It is currently expected that all of the Sunflower stores will be re-branded under the Sprouts banner by the end of 2012. The combined company will be a prominent player in the Western United States retail food industry, with projected 2012 annual revenues approaching $2 billion.
Sprouts is majority-owned by investment funds affiliated with Apollo Global Management, LLC (collectively with its subsidiaries, “Apollo”) including its affiliate AAA Investments, L.P. (the investment partnership of AP Alternative Assets, L.P. (EURONEXT AMSTERDAM: AAA)). Sprouts is operated by the Boney Family and an executive team with many years of collective experience in the grocery business. Sunflower, co-founded in 2002 by Libby Cook and Randy Clapp, is privately owned by the co-founders, management and KMCP Advisors, a provider of private expansion capital. The combined company will continue to be majority-owned and controlled by Apollo.
Andrew S. Jhawar, a Senior Partner at Apollo and Co-Head of Apollo’s Consumer and Retail Industry Group, said, “We feel incredibly fortunate to be able to bring together the management and operations of these two growth-oriented grocery retailers who focus on natural and organic products. In doing so, Sprouts will become an even better company offering more value to the nearly 1.5 million customers who regularly shop at the combined company’s stores. This is a combination that makes great sense given the rapid growth in demand for natural and organic products and the complementary nature of the geography of the two companies. Apollo is excited to support Sprouts’ dynamic management team and to help the company prepare for continued growth throughout the United States.”
Stan Boney, Chairman of the Board of Sprouts, said, “Andy and the team at Apollo have been very supportive in helping us to continue to grow our company. Sprouts is now making a meaningful contribution to the lives of almost 10,000 employees and millions of customers, who appreciate the value offered in our stores. Sprouts has come a long way from its beginning only 10 years ago.”
Chris Sherrell, Sunflower President and CEO, said, “This is an exciting development. Over the past 10 years, both Sprouts and Sunflower have offered healthy food at a great value, while providing a friendly shopping experience in an easy-to-navigate store format. Merging the resources and talents of both companies means we’ll be able to accelerate new store growth and optimize our offerings. I’m confident that both Sunflower and Sprouts customers and employees will be impressed with the evolution and advancement our companies can achieve together.”
Sprouts traces its lineage back to Henry Boney, a San Diego entrepreneur who in 1943 opened his first business, a fruit stand at the corner of 71st and El Cajon Boulevard near La Mesa. 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 was elected to the San Diego County Board of Supervisors. The second generation of Boney’s stores were opened in 1969 by Henry’s sons, Stan, Steve, and later 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., which later sold them again. Henry’s son, Stan, and his grandson, Shon, along with family friends Kevin Easler and Scott Wing, returned to the natural foods business in 2002 when they opened the first Sprouts Farmers Market store in Chandler, Arizona. Sprouts grew rapidly, and just 10 months ago reunited with Henry’s in a merger sponsored by Apollo. Sprouts currently operates 104 stores across Arizona, California, Colorado and Texas, including two stores in Temecula, California, that still operate under the Henry’s name. Sunflower was originally co-founded in 2002 by Libby Cook and Randy Clapp, also co-founders of Wild Oats. Sunflower grew rapidly in New Mexico, Colorado and Arizona, and eventually pushed into new markets such as Nevada, Utah, Texas, Oklahoma and California. “Given our continued growth,” added Stan Boney, “I can’t help but think about how my father would have reacted. He would certainly recognize his handprint in both Sprouts and Sunflower, and I think he’d be amazed at everything that we’ve been able to accomplish in such a short time.” 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 Global Management reported $75 billion in assets under management as of December 31, 2011. Apollo Global Management’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.