Dive Brief:

• The Save Mart Companies announced on Monday it has been bought by private equity firm Kingswood Capital Management. Terms of the deal were not disclosed.
• The acquisition of the grocery company, which runs roughly 200 stores under the Save Mart, Lucky California and FoodMaxx banners in California and Nevada and also owns a transportation company, follows Kingswood's purchase last year of home goods retail chain Cost Plus World Market. 
• The announcement marks the latest sale of a regional grocery chain as smaller food retailers deal with competition from better-capitalized rivals.

Dive Insight:

The Save Mart Companies recently celebrated its 70th anniversary, and before Monday’s acquisition announcement had been the largest family owned grocer in California.

Started in 1952, the company grew through a combination of organic expansion and strategic acquisitions to include dozens of Northern California stores across several banners. The company’s FoodMaxx banner first opened in the 1980s and grew through purchases of stores from brands like Fleming and Albertsons.

In 2007, The Save Mart Companies doubled its size through the acquisition of around 130 stores from Albertsons’ Northern California division and rebranded those stores under the Lucky name. Recently, the company has updated many of its Lucky locations under the name Lucky California.

For Kingswood, the deal offers a way to expand its retail footprint in Northern California, according to Monday’s announcement. The private equity firm acquired Cost Plus World Market from Bed Bath & Beyond early last year. In 2020, Kingswood acquired Canadian outdoor equipment retailer MEC.

Kingswood says it focuses on the "lower-middle" market and is interested in industries including the energy, media, technology and health care sectors in addition to retail. The private firm looks at equity investments worth up to $75 million in companies with revenue between $100 million and $500 million, according to its website.

Monday’s acquisition news is the latest instance of a private equity firm acquiring a grocery retailer. Apollo Global Management acquired The Fresh Market in 2016 for $1.36 billion and then bought West Coast warehouse chain Smart & Final for $1.1 billion before selling it to Mexican grocery conglomerate Grupo Comercial Chedraui for a little over half that amount.

Albertsons, meanwhile, expanded rapidly under the ownership of Cerberus Management Group, which acquired the chain in 2006. The grocer finally went public in 2020.

Regional grocers are also consolidating in order to scale up and battle larger competitors. Price Chopper/Market 32 and Tops Markets agreed to merge a little over a year ago, and several months later West Coast chain Raley's acquired Arizona-based Bashas'.