Boise, Idaho-based Albertsons Cos. Inc. says that funds managed by affiliates of Apollo Global Management Inc. have led the purchase of $1.75 billion of convertible preferred stock of Albertsons Cos. Following a repurchase of a portion of the common stock owned by the company’s current shareholders, on an as-converted basis the preferred stock will represent approximately 17.5 percent of pro forma common stock outstanding.
The transaction is expected to close by June 15, subject to customary closing conditions.
“Albertsons Companies is pleased to work with Apollo and its co-investors. Apollo knows our industry and business model well, given its significant prior history of successful investments in the grocery sector. We believe the investment led by the Apollo Funds represents a vote of confidence in both our business and our long-term strategy,” said Vivek Sankaran, president and CEO of Albertsons Cos. “We are also proud to have the continued support of our owners, a consortium led by Cerberus Capital Management L.P., which also includes Kimco Realty Corp., Klaff Realty LP, Lubert-Adler Partners LP and Schottenstein Stores Corp. We appreciate their tremendous support over the years in operations, technology and financing as we have grown our business and our platform, and especially during the COVID-19 pandemic as we focus on the safety and well-being of our associates, customers and communities.”
Justin Korval, partner in Apollo’s Hybrid Value Business, said, “We are excited to work with the strong management team at Albertsons Companies, and believe the business has compelling growth opportunities ahead via e-commerce penetration, expansion of the company’s innovative Own Brands portfolio, and merchandising and marketing initiatives. This investment, led by our hybrid value team in partnership with our credit platform, marks the third sizable transaction in the last month and exemplifies the breadth of Apollo’s capabilities and the creative capital solutions we can deliver to great companies.”
PJT Partners and Credit Suisse along with BofA Securities, Goldman Sachs & Co. LLC, J.P. Morgan and Citigroup acted as financial advisors to the company. Schulte Roth & Zabel LLP and Greenberg Traurig LLP acted as legal advisors to the company. The Apollo Funds were advised by Barclays, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, Gibson Dunn, and Morgan, Lewis & Bockius.
Albertsons Cos. operates stores across 34 states and the District of Columbia under 20 banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs.
