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Large private equity firm buys big stake in Boise’s Albertsons

Idaho Business pres. by My 102.7

Boise-based Albertsons Companies attracted a large new investor. Apollo Global Management bought a 17.5% chunk of the grocery giant’s preferred stock, according to a news release.

The deal would bring in $1.75 billion to the grocery chain, which remains privately held.

“Apollo knows our industry and business model well, given its significant prior history of successful investments in the grocery sector,” Albertsons CEO Vivek Sankaran said in a statement. “We believe the investment led by the Apollo Funds represents a vote of confidence in both our business and our long-term strategy.”

[Q&A with Albertsons: Worker safety, hiring furloughed workers, COVID precautions and more]

That ‘prior history’ for Apollo includes a former stake in Sprouts, as well as current ownership of discount grocer Smart & Final.

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“We are excited to work with the strong management team at Albertsons Companies, and believe the business has compelling growth opportunities ahead via eCommerce penetration, expansion of the Company’s innovative Own Brands portfolio, and merchandising and marketing initiatives,” Apollo partner Justin Korval said.

Cerberus Capital Management remains the controlling owner of the company, which it first acquired from Albertsons Inc. in 2006. Cerberus purchased a small segment of underperforming stores from Albertsons Inc., and later purchased the rest of the stores from Supervalu. It later bought Safeway and merged it into Albertsons.

The company’s news release did not say how the stake purchased by Apollo would change the ownership makeup of the company, except to note that Cerberus remains its ‘owner.’

Albertsons attempted to go public several times, and remains in the process of considering an initial public offering – though it has not yet set a date or target price.

Apollo owns stakes in a wide variety of companies. In addition to its grocery holdings, it owns stakes in Qdoba, Claire’s Stores, ADT, Chuck E. Cheese and many others.

[Albertsons sees massive sales increase, huge ecommerce boom and hires 55,000 people]

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