Berkshire Partners Invests in Grocery Outlet

Berkshire Partners has made a private equity investment in Grocery Outlet Inc., a Berkeley, Calif.-based discount grocer with over 135 stores in the Western U.S. No financial terms were disclosed.

PRESS RELEASE

Berkshire Partners LLC, a Boston-based private equity firm, today announced it has signed a definitive agreement to make an equity investment in Grocery Outlet Inc., an extreme value grocery retailer with over 135 stores in the Western United States. Terms of the transaction were not disclosed.

Headquartered in Berkeley, California, Grocery Outlet Inc. is a third-generation family-owned business that was founded in 1946 by Jim Read. Today the company is led by Co-Chief Executive Officers MacGregor Read and Eric Lindberg. Grocery Outlet is able to offer brand-name products up to 60% below traditional retailers by purchasing discounted surplus inventory directly from more than 2,500 grocery manufacturers. Grocery Outlet stores are managed by local, independent operators.

“We believe Grocery Outlet has a unique operating model that offers customers tremendous values on brand names they trust in a friendly, high quality shopping environment. Over the past few years, Grocery Outlet has successfully invested in broadening its product offering, improving its marketing efforts, and opening new stores,” said Chris Hadley, Managing Director of Berkshire Partners. “We are excited to partner with the Read family and the management team of Grocery Outlet, and believe the company is very well positioned for future growth.”

On behalf of the Reads and the entire Grocery Outlet family, Executive Chairman Steven Read and Chairman Peter Read commented, “We are excited to welcome the Berkshire team and look forward to combining our experiences and capital to develop future opportunities for our company.”

MacGregor Read, Co-Chief Executive Officer of Grocery Outlet said, “We look forward to expanding Grocery Outlet with the strategic and financial support of our new partners at Berkshire.”

Berkshire Partners has a strong track record of investing in value retailers. Prior transactions include National Vision, an operator of value-oriented vision centers, Party City, a retailer of party goods, and Savers, a retailer of secondhand merchandise.

About Grocery Outlet Inc.

Based in Berkeley, California, Grocery Outlet offers extreme bargains on brand name merchandise, with prices often up to 60% less than conventional retailers. The largest “extreme value” grocer in the United States, Grocery Outlet has over 135 locations in Arizona, California, Idaho, Nevada, Oregon and Washington. Grocery Outlet carries refrigerated and frozen foods, fresh produce, organics, dry groceries, beer and wine, health and beauty care, fresh vitamins, household products, toys and gifts. A third-generation family-owned company founded in 1946, Grocery Outlet’s mission has always been to provide customers a fun place to find extreme values on name brands they trust. Most stores are independently operated by locally based families. For more information on Grocery Outlet, visit www.groceryoutlet.com.

About Berkshire Partners LLC

Berkshire Partners has invested in mid-sized companies since the mid 1980s through seven investment funds with aggregate capital commitments of approximately $6.5 billion. Berkshire seeks transactions in which it can invest $50 million to $500 million of equity capital. Berkshire has developed specific industry experience in several areas, including retailing, consumer products, manufacturing, transportation, energy, business services and communications. Over the past two decades, Berkshire has been an investor in over 90 operating companies with approximately $20 billion of acquisition value and combined revenues over $22 billion. For additional information, visit www.berkshirepartners.com.