Sprouts to Pay Out $282 Million Dividend to Shareholders, Including Apollo

Apollo Global Management is getting some of its investment back from Sprouts Farmers Market after just two years.

Sprouts has boosted the size of a covenant lite loan to $700 million from $625 million, according to Thomson Reuters Loan Pricing Corp. The $700 million loan, along with a $60 million revolver, will be used to pay out a special dividend and refinance existing debt, Thomson Reuters LPC says.

Sprouts will use proceeds of the upsized loan to boost the proposed shareholder distribution to $282 million from $207 million, Moody’s Investors Service says.

In 2011, Apollo acquired a majority stake in Sprouts and then combined the company with Henry’s Farmer’s Markets. It’s unclear how much Apollo provided but the investment came from its seventh fund, which raised $14.7 billion in 2008. (Thomson Reuters Loan Pricing Corp. reported at the time that Sprouts took out a $370 million loan to back the buyout.) Sprouts last year merged with Sunflowers Farmers Market in a bid to compete against Whole Foods and Trader Joe’s on the West Coast.

Phoenix-based Sprouts is a natural food grocery store that operates on the mantra “healthy living for less.” Sprouts, which sells fruits, vegetables and herbs, operates 154 stores in eight states, including Arizona, California, Texas and Colorado. Apollo owns about 52% of Sprouts, while the rest is owned by management, private investors and the founding family, Moody’s says.

Apollo declined comment.

Photo courtesy of Sprouts