Reports: Smart & Final Exploring Sale
COMMERCE, CA - Is Smart & Final Stores Inc. for sale? Sources close to the matter have said that it may be, an exclusive report by Reuters affirms. That report suggests that the retailer's majority stakeholder, private equity firm Ares Management Corp, is exploring its options and may seek to cash out.
Ares first acquired controlling interest in the retail and foodservice chain in 2012. At that time, Ares purchased a $975 million stake in Smart & Final from Apollo Global Management—including assumed debt.
Subsequent to that deal, in 2014, Ares took Smart & Final public. The shares, initially priced at $12, have since lost value as the retailer struggles in a competitive marketplace.
Sources told Reuters there is no certainty of a sale and Ares declined to comment to the news source. Smart & Final issued a statement to the news source noting that “the company is focused on executing its strategic plan and that its longstanding policy is not to comment on market rumors or speculation.”
As of October 7, Smart & Final held, net of debt issuance costs, $653.0 million in debt. At that time, the company operated 324 grocery and foodservice locations under the "Smart & Final," "Smart & Final Extra!" and "Smart Foodservice Warehouse Stores" in California, Oregon, Washington, Arizona, Nevada, Idaho, Montana, and Utah. It additionally operated 15 stores in Northwestern Mexico through a joint venture.
"Our third quarter performance was solid with 2.8% year-over-year growth in overall sales,” said Smart & Final’s President and CEO David Hirz in the company’s third quarter 2018 financial statement. “We also delivered our sixth consecutive quarter of positive comparable store sales, with growth in both average transaction size and merchandise margins despite greater pressure from deflation in product prices.”
Is a sale forthcoming? And who could emerge as a suitor for the +300-store chain? AndNowUKnow will continue to report.