[Related Stories: February 16, 2011: Breaking: Smart & Final Enters Into Agreement to Sell Henry's to Sprouts Farmers Market; February 15, 2011: 'The Insider' - Sprouts Farmers Market's Acquisition of Henry's to Be Announced This Week, As Early As Wednesday; and January 5, 2011: 'The Insider' - Will 2011 See Sprouts Farmers Market Acquiring Henry's Farmers Market? 'The Insider' Says it Could Be in The Cards.]
In conjunction with the announcement today that Phoenix, Arizona-based Sprouts Farmers Market has acquired Smart & Final-owned Irvine, California-based Henry's Farmers Market, the new combined farmers market-style food and grocery retailing chain, to be operated by Sprouts and majority-owned by New York City-based private equity firm Apollo Global Management (which also will continue to be the majority-owner of Smart & Final), has created and launched a new website: 1farmersmarket.com.
Apollo Global Management, the financial force behind the Sprouts-Henry's deal, was founded by Leon Black, who continues to serve as the private equity firm's chairman and chief deal-maker. [See - January 11, 2011: A 'New York State of Mind': 'The Insider' On Walmart, Apollo Global Management, Tesco's Fresh & Easy and the NRF in New York City.]
The new "family" website tells the story of the closely-related history of the two farmers market-style food and grocery retailing chains, Henry's and Sprouts - which as we've detailed extensively in Fresh & Easy Buzz were both founded by the Boney family - and how the deal announced today merges or reunites the two grocers back into "one family."
Below (in italics) is how the story is told on the new website:
Sprouts Announces Combination with Henry's, Creating Leading Farmers Market Specialty Retailer
Apollo Management to be Majority Owner of Combined Company
Sprouts Farmers Market ("Sprouts") and Henry's Farmers Market ("Henry's"), two companies originally founded by the Boney Family that have operated under separate owners for almost a decade, announced the execution of definitive agreements to combine operations under the majority ownership and sponsorship of Apollo Management, L.P., one of the world's leading private equity firms.
The combined company will operate under the Sprouts Farmers Market name and will be one of the largest players in the exciting, fast-growing "farmers market" specialty segment of the retail food industry, as well as one of the largest grocers in the Western U.S. with annual revenues in excess of $1 billion. The transaction is expected to close early in the second quarter 2011.
The combined company will be managed from an operating perspective by the Boney family and will eventually operate all stores under the single name Sprouts Farmers Market. The new company will have 98 stores and more than 7,000 employees at the time the transaction is closed. The combined company plans to open up to 10 additional new stores during 2011.
Andrew S. Jhawar, a Senior Partner at Apollo and Co-Head of Apollo's Consumer and Retail Industry Group said, "We are very excited about partnering with Stan Boney, Shon Boney, Doug Sanders and the thousands of employees at Sprouts and Henry's to help reunite these two great companies under the Boney family's leadership. After the combination, Sprouts will be one of the largest, growth oriented specialty retailers in the U.S. with a focus on natural and organic products. Apollo looks forward to supporting the management team's vision for significant future new store growth across the country."
Stan Boney, Chairman of the Board at Sprouts said, "The combination of Sprouts and Henry's is an exciting chapter in our family's lives, and we look forward to continuing to deliver on our mission of helping America eat healthier, live longer and spend less. Apollo is one of the most experienced and successful private equity firms in the nation and we are excited about their support for our business model and look forward to working together with Andy and his team."
The combination of the Sprouts and Henry's businesses will occur through an equity investment and recapitalization of the existing Sprouts business by Apollo. A concurrent purchase of the Henry's business will be made from Commerce, California based Smart & Final Holdings Corp., an Apollo portfolio company since 2007. Following the transaction, Apollo will be the majority owner of Sprouts and will continue to be the principal equity owner of Smart & Final Holdings.
As closely held companies, neither Sprouts nor Henry's discloses financial information. Terms of the transaction weren't disclosed.
Roots in San Diego
The namesake of the Henry's stores was Henry Boney, a San Diego entrepreneur who opened his first business, a fruit stand at the corner of 70th and University in San Diego, in 1943. Over the years, he and his family started and sold many retail businesses, including Speedee Mart, Boney's and Windmill Farms. Mr. Boney was also well known in San Diego political and charitable circles and served on the San Diego County Board of Supervisors.
The second generation of Boney's stores were opened in 1969 by Henry's sons, Stan and Steve. The name was changed to Henry's Marketplace in 1997. The Boney family ran Henry's until 1999, when the stores were sold to Wild Oats Markets, Inc. In 2007, Whole Foods Market, Inc. purchased Wild Oats and sold the Henry's stores to Smart & Final Holdings Corp., which operates 290 stores under four store banners in the western U.S. Currently, Henry's operates 43 total store locations, comprised of 34 stores in California and 9 stores in Texas (operating under the Sun Harvest banner).
Henry's son, Stan, and his grandson, Shon, along with other family friends, returned to the natural foods business in 2002 when they opened the first Sprouts Farmers Market store in Chandler, Arizona. Sprouts has grown rapidly since, with 55 stores across Arizona, California, Colorado and Texas. Sprouts was named the Western Retailer of the Year in 2010 by Gourmet News magazine.
The stores share more in common than their lineage. Both Henry's and Sprouts are farmers market style grocery stores, with an informal, wide-open store design and a strong emphasis on fresh, high quality produce at a great value. Averaging about 26,000 square feet in size, the stores are easy to shop and navigate yet still have extensive offerings in virtually every major category (produce, grocery, dairy, frozen, meat, seafood, bakery, deli, bulk, vitamins, body care, household products, beer and wine) — largely natural and organic. All of these elements have been hallmarks of the Boney Family's retail establishments since the very beginning.
"For all the businesses he built during his career, my father would marvel at the efficiency with which we bring produce and natural foods to so many customers today and at such a good value," added Stan Boney. "And now, by reuniting these stores that he inspired, we're going to become even better at it."
Apollo Management, L.P. and its subsidiaries are affiliates of Apollo Global Management, LLC (together with its subsidiaries, "Apollo Global Management"), a leading global alternative asset manager. Apollo reported $57.8 billion in assets under management as of September 30, 2010. Apollo's investments in retail and consumer-oriented businesses have included Smart & Final, Claire's Stores, CKE Restaurants, General Nutrition Centers, AMC Entertainment, Rent-A-Center, Ralphs Grocery Company, Dominick's Supermarkets, Zale Corporation and Proffitt's Department Stores.
The new Sprouts-Henry's family website also has links to the existing Sprouts Farmers Market, Henry's Farmers Market and Sun Harvest Farmers Market websites, as you can see here. SunHarvest is the banner Henry's uses in Texas. The Sun Harvest stores are part of the deal.
The site also includes a F.A.Q. page, in which a number of questions about the acquisition/merger are posed - and answered.
For example, the first Q/A is:
Q. What will happen to the Henry's and Sun Harvest names?
A. For the time being, nothing. Until the transaction closes, which we hope will be early this spring, Henry’s/Sun Harvest and Sprouts will remain separate and distinct entities. After that, the likelihood is that later in 2011 or 2012, all Henry's and Sun Harvest stores will become Sprouts stores. However, we know that it is important that we keep strong ties to the name “Henry’s” and all the good will that has been built up over the years, so we will work hard to find ways to keep that alive.
[Click here to see the other Questions and Answers about the deal on the F.A.Q. page.]
Additionally, the 1farmersmarket.com website features a list of the combined Sprouts Farmers Market (55 units) and Henry's Farmers Market (36 units in California)/Sun Harvest Farmers Market (10 markets in Texas) stores, located in California, Nevada, Arizona, Colorado and Texas, along with offering pages for media and general contact information, as well as employment info.
The combined Sprouts-Henry's chain (101 stores) will employ about 7,000 workers, according to Kim Rockley, a spokesperson for Sprouts Farmers Market.
In addition, according to Rockley, current plans call for the chain, which will be operated by Sprouts out of its existing corporate headquarters in Phoenix, Arizona, to open 10-15 new stores a year, over the next few years. Sprouts' CEO Doug sanders says plans call for opening 10 new stores this year, and 10-12 new units in 2012. It's Apollo Global Management's goal to grow Sprouts Farmers Market into a national chain, eventually expanding beyond the western states. As we've previously reported in Fresh & Easy Buzz, annual sales of a combined Sprouts and Henry's will be about $1 billion.
Both Sprouts Farmers Market and Henry's Farmers Market had numerous new stores in the pipeline pre-deal, including in Northern California, which is the newest market region for both chains. Sprouts (in Sunnyvale) and Henry's (in Elk Grove) opened their first stores respectively in Northern California in 2010. [See: Northern California Special Report.]
Social media
Sprouts Farmers Market has also integrated its own existing Twitter feeds and Facebook page into Henry's existing Twitter feed and Facebook page.
In fact, two tweets posted today announcing the deal are the first ones that have been made on the Henry's Farmers Market Twitter feed since July 2010. We noted the inactivity on the Henry's feed previously in Fresh & Easy Buzz, and on our own Twitter feed.
An announcement about the deal was also made on the Henry's Farmers Market Facebook page, which has been regularly updates by Henry's right up until today's announcement.
Sprouts Farmers Market operates an existing Facebook page, along with multiple Twitter feeds, covering each of the regions where it operates stores.
The combined Sprouts-Henry's chain will have 101 farmers market-style food and grocery stores in five Western U.S. states: California, Nevada, Arizona, Colorado and Texas.
Additionally, because the majority of the Henry's stores are in Southern California, Sprouts' store- count in the region will more than double, making it a much bigger and tougher player in the highly-populated region.
Note to Readers
[You can read about all of the parties involved in the deal in the Fresh & Easy Buzz archives. Just click on the following links - Henry's Farmers Market, Smart and Final, Sprouts, Sprouts Farmers Market, Sprouts-Henry's Deal and The Insider. Also see the following related links for more stories about Sprouts, Henry's and Smart & Final: Fresh and Easy Southern California, Fresh and Easy Northern California, Northern California, Northern California Special Report, Roseville CA, Sunflower Farmers Market. Use the "older posts and "newer posts" links at the bottom of each linked page for additional pages/stories.]
In conjunction with the announcement today that Phoenix, Arizona-based Sprouts Farmers Market has acquired Smart & Final-owned Irvine, California-based Henry's Farmers Market, the new combined farmers market-style food and grocery retailing chain, to be operated by Sprouts and majority-owned by New York City-based private equity firm Apollo Global Management (which also will continue to be the majority-owner of Smart & Final), has created and launched a new website: 1farmersmarket.com.
Apollo Global Management, the financial force behind the Sprouts-Henry's deal, was founded by Leon Black, who continues to serve as the private equity firm's chairman and chief deal-maker. [See - January 11, 2011: A 'New York State of Mind': 'The Insider' On Walmart, Apollo Global Management, Tesco's Fresh & Easy and the NRF in New York City.]
The new "family" website tells the story of the closely-related history of the two farmers market-style food and grocery retailing chains, Henry's and Sprouts - which as we've detailed extensively in Fresh & Easy Buzz were both founded by the Boney family - and how the deal announced today merges or reunites the two grocers back into "one family."
Below (in italics) is how the story is told on the new website:
Sprouts Announces Combination with Henry's, Creating Leading Farmers Market Specialty Retailer
Apollo Management to be Majority Owner of Combined Company
Sprouts Farmers Market ("Sprouts") and Henry's Farmers Market ("Henry's"), two companies originally founded by the Boney Family that have operated under separate owners for almost a decade, announced the execution of definitive agreements to combine operations under the majority ownership and sponsorship of Apollo Management, L.P., one of the world's leading private equity firms.
The combined company will operate under the Sprouts Farmers Market name and will be one of the largest players in the exciting, fast-growing "farmers market" specialty segment of the retail food industry, as well as one of the largest grocers in the Western U.S. with annual revenues in excess of $1 billion. The transaction is expected to close early in the second quarter 2011.
The combined company will be managed from an operating perspective by the Boney family and will eventually operate all stores under the single name Sprouts Farmers Market. The new company will have 98 stores and more than 7,000 employees at the time the transaction is closed. The combined company plans to open up to 10 additional new stores during 2011.
Andrew S. Jhawar, a Senior Partner at Apollo and Co-Head of Apollo's Consumer and Retail Industry Group said, "We are very excited about partnering with Stan Boney, Shon Boney, Doug Sanders and the thousands of employees at Sprouts and Henry's to help reunite these two great companies under the Boney family's leadership. After the combination, Sprouts will be one of the largest, growth oriented specialty retailers in the U.S. with a focus on natural and organic products. Apollo looks forward to supporting the management team's vision for significant future new store growth across the country."
Stan Boney, Chairman of the Board at Sprouts said, "The combination of Sprouts and Henry's is an exciting chapter in our family's lives, and we look forward to continuing to deliver on our mission of helping America eat healthier, live longer and spend less. Apollo is one of the most experienced and successful private equity firms in the nation and we are excited about their support for our business model and look forward to working together with Andy and his team."
The combination of the Sprouts and Henry's businesses will occur through an equity investment and recapitalization of the existing Sprouts business by Apollo. A concurrent purchase of the Henry's business will be made from Commerce, California based Smart & Final Holdings Corp., an Apollo portfolio company since 2007. Following the transaction, Apollo will be the majority owner of Sprouts and will continue to be the principal equity owner of Smart & Final Holdings.
As closely held companies, neither Sprouts nor Henry's discloses financial information. Terms of the transaction weren't disclosed.
Roots in San Diego
The namesake of the Henry's stores was Henry Boney, a San Diego entrepreneur who opened his first business, a fruit stand at the corner of 70th and University in San Diego, in 1943. Over the years, he and his family started and sold many retail businesses, including Speedee Mart, Boney's and Windmill Farms. Mr. Boney was also well known in San Diego political and charitable circles and served on the San Diego County Board of Supervisors.
The second generation of Boney's stores were opened in 1969 by Henry's sons, Stan and Steve. The name was changed to Henry's Marketplace in 1997. The Boney family ran Henry's until 1999, when the stores were sold to Wild Oats Markets, Inc. In 2007, Whole Foods Market, Inc. purchased Wild Oats and sold the Henry's stores to Smart & Final Holdings Corp., which operates 290 stores under four store banners in the western U.S. Currently, Henry's operates 43 total store locations, comprised of 34 stores in California and 9 stores in Texas (operating under the Sun Harvest banner).
Henry's son, Stan, and his grandson, Shon, along with other family friends, returned to the natural foods business in 2002 when they opened the first Sprouts Farmers Market store in Chandler, Arizona. Sprouts has grown rapidly since, with 55 stores across Arizona, California, Colorado and Texas. Sprouts was named the Western Retailer of the Year in 2010 by Gourmet News magazine.
The stores share more in common than their lineage. Both Henry's and Sprouts are farmers market style grocery stores, with an informal, wide-open store design and a strong emphasis on fresh, high quality produce at a great value. Averaging about 26,000 square feet in size, the stores are easy to shop and navigate yet still have extensive offerings in virtually every major category (produce, grocery, dairy, frozen, meat, seafood, bakery, deli, bulk, vitamins, body care, household products, beer and wine) — largely natural and organic. All of these elements have been hallmarks of the Boney Family's retail establishments since the very beginning.
"For all the businesses he built during his career, my father would marvel at the efficiency with which we bring produce and natural foods to so many customers today and at such a good value," added Stan Boney. "And now, by reuniting these stores that he inspired, we're going to become even better at it."
Apollo Management, L.P. and its subsidiaries are affiliates of Apollo Global Management, LLC (together with its subsidiaries, "Apollo Global Management"), a leading global alternative asset manager. Apollo reported $57.8 billion in assets under management as of September 30, 2010. Apollo's investments in retail and consumer-oriented businesses have included Smart & Final, Claire's Stores, CKE Restaurants, General Nutrition Centers, AMC Entertainment, Rent-A-Center, Ralphs Grocery Company, Dominick's Supermarkets, Zale Corporation and Proffitt's Department Stores.
The new Sprouts-Henry's family website also has links to the existing Sprouts Farmers Market, Henry's Farmers Market and Sun Harvest Farmers Market websites, as you can see here. SunHarvest is the banner Henry's uses in Texas. The Sun Harvest stores are part of the deal.
The site also includes a F.A.Q. page, in which a number of questions about the acquisition/merger are posed - and answered.
For example, the first Q/A is:
Q. What will happen to the Henry's and Sun Harvest names?
A. For the time being, nothing. Until the transaction closes, which we hope will be early this spring, Henry’s/Sun Harvest and Sprouts will remain separate and distinct entities. After that, the likelihood is that later in 2011 or 2012, all Henry's and Sun Harvest stores will become Sprouts stores. However, we know that it is important that we keep strong ties to the name “Henry’s” and all the good will that has been built up over the years, so we will work hard to find ways to keep that alive.
[Click here to see the other Questions and Answers about the deal on the F.A.Q. page.]
Additionally, the 1farmersmarket.com website features a list of the combined Sprouts Farmers Market (55 units) and Henry's Farmers Market (36 units in California)/Sun Harvest Farmers Market (10 markets in Texas) stores, located in California, Nevada, Arizona, Colorado and Texas, along with offering pages for media and general contact information, as well as employment info.
The combined Sprouts-Henry's chain (101 stores) will employ about 7,000 workers, according to Kim Rockley, a spokesperson for Sprouts Farmers Market.
In addition, according to Rockley, current plans call for the chain, which will be operated by Sprouts out of its existing corporate headquarters in Phoenix, Arizona, to open 10-15 new stores a year, over the next few years. Sprouts' CEO Doug sanders says plans call for opening 10 new stores this year, and 10-12 new units in 2012. It's Apollo Global Management's goal to grow Sprouts Farmers Market into a national chain, eventually expanding beyond the western states. As we've previously reported in Fresh & Easy Buzz, annual sales of a combined Sprouts and Henry's will be about $1 billion.
Both Sprouts Farmers Market and Henry's Farmers Market had numerous new stores in the pipeline pre-deal, including in Northern California, which is the newest market region for both chains. Sprouts (in Sunnyvale) and Henry's (in Elk Grove) opened their first stores respectively in Northern California in 2010. [See: Northern California Special Report.]
Social media
Sprouts Farmers Market has also integrated its own existing Twitter feeds and Facebook page into Henry's existing Twitter feed and Facebook page.
In fact, two tweets posted today announcing the deal are the first ones that have been made on the Henry's Farmers Market Twitter feed since July 2010. We noted the inactivity on the Henry's feed previously in Fresh & Easy Buzz, and on our own Twitter feed.
An announcement about the deal was also made on the Henry's Farmers Market Facebook page, which has been regularly updates by Henry's right up until today's announcement.
Sprouts Farmers Market operates an existing Facebook page, along with multiple Twitter feeds, covering each of the regions where it operates stores.
The combined Sprouts-Henry's chain will have 101 farmers market-style food and grocery stores in five Western U.S. states: California, Nevada, Arizona, Colorado and Texas.
Additionally, because the majority of the Henry's stores are in Southern California, Sprouts' store- count in the region will more than double, making it a much bigger and tougher player in the highly-populated region.
Note to Readers
[You can read about all of the parties involved in the deal in the Fresh & Easy Buzz archives. Just click on the following links - Henry's Farmers Market, Smart and Final, Sprouts, Sprouts Farmers Market, Sprouts-Henry's Deal and The Insider. Also see the following related links for more stories about Sprouts, Henry's and Smart & Final: Fresh and Easy Southern California, Fresh and Easy Northern California, Northern California, Northern California Special Report, Roseville CA, Sunflower Farmers Market. Use the "older posts and "newer posts" links at the bottom of each linked page for additional pages/stories.]
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