Grocery Outlet is to be acquired by Hellman & Friedman and Grocery Outlet’s senior management team from its principal owner, Berkshire Partners. Terms of the transaction were not disclosed.
Grocery Outlet, Inc. (www.groceryoutlet.com), the largest “extreme-value” grocer in the U.S., today announced that it has entered into a definitive agreement to be acquired by affiliates of Hellman & Friedman LLC along with Grocery Outlet’s senior management team from its principal owner, Berkshire Partners LLC. The terms of the transaction were not disclosed.
“Grocery Outlet’s unique operating model delivers tremendous value to consumers and suppliers alike”
Grocery Outlet offers branded grocery products at significant discounts through a unique sourcing model of purchasing discounted surplus inventory directly from over 3,000 supplier partners. The company was founded in 1946 by Jim Read and continues to be operated by the Read family, with third-generation family members MacGregor Read and Eric Lindberg currently leading the business as Co-Chief Executive Officers. Grocery Outlet has a network of more than 210 stores across six states, which are managed principally by local, independent operators.
MacGregor Read and Eric Lindberg, Co-CEOs of Grocery Outlet, said, “We are proud of Grocery Outlet’s 68 year history of bringing extreme value to our customers and building trusted partnerships with our suppliers. We thank Berkshire Partners for their contributions to Grocery Outlet’s growth and development over the past five years and welcome Hellman & Friedman as our new partner. We are excited to continue to build on the success of Grocery Outlet for our customers, independent operators and employees.”
“Grocery Outlet’s unique operating model delivers tremendous value to consumers and suppliers alike,” said Erik Ragatz, Managing Director of Hellman & Friedman. “With a network of high quality independent operators and an outstanding base of employees, Grocery Outlet is very well positioned to continue on its growth trajectory. We look forward to partnering with Eric and MacGregor and the rest of the management team as the company moves into its next phase of growth.”
Chris Hadley, Managing Director of Berkshire Partners, said, “We are proud to have been part of Grocery Outlet’s successful growth over the past five years. During our partnership, we worked closely with Grocery Outlet’s exceptional management team to enhance the company’s capabilities and to grow the company’s store base. We look forward to seeing the next stage of the company’s development.”
Barclays and Goldman, Sachs & Co. served as financial advisors to Grocery Outlet in connection with the transaction. Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. served as financial advisors to Hellman & Friedman. Weil, Gotshal & Manges LLP, Simpson Thacher & Bartlett LLP and Sullivan & Cromwell LLP served as legal advisors to Grocery Outlet, Hellman & Friedman and Grocery Outlet’s senior management, respectively.
About Grocery Outlet
Based in Emeryville, California, Grocery Outlet offers extreme bargains on brand name merchandise, with prices often up to 60% cheaper than conventional retailers. The largest “extreme-value” grocer in the U.S., Grocery Outlet has over 210 locations in California, Idaho, Nevada, Oregon, Washington, and Pennsylvania. Grocery Outlet carries refrigerated and frozen foods, fresh produce, fresh meat, organics, dry groceries, beer and wine, health and beauty care, over-the-counter drugs, and household products. A third-generation family-led 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 owned and operated by locally-based families. For more information, please visit www.groceryoutlet.com.
About Hellman & Friedman LLC
Hellman & Friedman LLC is a leading private equity investment firm with offices in San Francisco, New York, and London. Since its founding in 1984, H&F has raised and, through its affiliated funds, managed over $25 billion of committed capital. The firm focuses on investing in superior business franchises and serving as a value-added partner to management in select industries including internet, digital & traditional media, business, marketing & information services, software, insurance, financial services, energy & industrials, and healthcare.
About Berkshire Partners
Berkshire Partners, the Boston-based investment firm, has invested in over 110 middle market companies since 1986 through eight private equity funds with aggregate capital commitments of $11 billion. Berkshire has developed specific industry experience in several areas including consumer products and retail, business services, industrials, communications and transportation. Berkshire has a strong history of partnering with management teams to grow the companies in which it invests with the goal of consistently achieving superior investment returns. The firm is currently investing from Berkshire Fund VIII, a $4.5 billion fund raised in 2011. Berkshire seeks to invest $50 million to $500 million of equity capital in each portfolio company.