Dive Brief:
- Chicago-based specialty grocery chain Tony's Fresh Market has been acquired by Apollo Funds, a collection of funds managed by affiliates of private equity firm Apollo Global Management, according to a Wednesday press release. Terms of the deal were not disclosed.
- Tony's, which carries an assortment that includes fresh produce, multicultural items and prepared foods, operates 18 stores in the Chicago area and plans to open several additional locations.
- The transaction continues a trend that has seen several other regional grocery companies change hands or merge recently.
Dive Insight:
The sale of Tony's to Apollo marks the end of an era for the grocery chain, which was started in 1979 by Italian immigrants Tony Ingraffia and Domenico Gambino and has been family run since its inception.
Apollo said in the announcement that the company's founders will retain shares in the company and hold management positions, but did not provide details.
Joanna Reiss, an Apollo partner and the firm's co-lead of impact investing, indicated in the press release that the private equity firm wants to open more locations and expand Tony's efforts to provide "healthy and affordable food" to communities where it operates.
"With our investment in Tony’s, we are proud to support a high-performing company that is increasing access to quality, affordable groceries in a broad swath of neighborhoods as well as donating to local food banks to fight hunger," Reiss said in a statement. "We hope to further strengthen and scale Tony’s, and by doing so achieve strong financial performance alongside even greater impact."
Apollo also hopes to achieve "strong organic growth" through its management of Tony's, Andrew Jhawar, another partner in the firm, said in the announcement, pointing to the grocer's loyalty programs and e-commerce operations as areas where it intends to invest.
Apollo's acquisition of Tony's continues the private equity firm's ties to the grocery industry. The firm took over The Fresh Market in 2016, and filed plans last year to take the retailer public. The company bought a $1.75 billion stake in Albertsons in 2020 and also made a significant investments in Sprouts Farmers Markets. Last year, the firm sold off the warehouse chain Smart & Final to Mexican retailer Grupo Comercial Chedraui for $620 million.
Although food retailers got a major sales boost from the pandemic, they still face considerable competition from larger chains and pressure to invest more in digital operations. The transaction between Tony's and Apollo follows on the heels of the sale in March of The Save Mart Companies, which operates supermarkets under several banners in California and Nevada, to private equity firm Kingswood Capital Management.
Other recent deals involving regional grocers include the acquisition by Raley's of Arizona chain Bashas' and the merger of Northeastern grocers Price Chopper/Market 32 and Tops Markets, both of which occurred last year.
