Boise-based Albertsons hired a pair of big investment bankers to help it explore “strategic alternatives” and said it will look at a variety of options for the grocery giant.
It’s unclear what the review might mean for the company, but the language in a news release indicates it could consider a sale, a large purchase, or a host of other concepts.
The company’s board of directors said it hired Goldman Sachs and Credit Suisse to assist in the review.
“The review will include an assessment of various balance sheet optimization and capital return strategies, potential strategic or financial transactions and development of other strategic initiatives to complement Albertsons’ existing businesses, as well as responding to inquiries,” the company said in its news release.
Goldman Sachs and Credit Suisse are two of the largest investment bankers, and often help with large financial transactions, including spinoffs, mergers, and acquisitions.
“The Board believes the continuing strength of our business and the scale of our portfolio of assets warrants a deep and considered review of all possible paths towards maximizing value creation,” Albertsons board of directors co-chair Chan Galbato said. “The board believes that this review, coupled with an ongoing focus on accelerating our transformation strategy, will create enhanced value for all our stakeholders including our customers, associates, and investors.”
A news release said there is no timetable for the review — and that the review may not “result in any transaction or other strategic change or outcome,” and says it won’t comment further.
Albertsons went public in 2020 and has seen its stock increase significantly since its IPO. It has seen strong earnings in the nearly two years since the start of the COVID-19 pandemic, and has touted increases in its digital sales. The company has several large institutional investors in the mix, including Cerberus Capital Management.
The company’s stock quickly popped in after-hours trading on the news, increasing by more than 13%.
Major Idaho player
Albertsons, which owns stores under its own name, and brands like Safeway, Carrs, Pavilions, Jewel-Osco, and others operates 2,270 stores across the country and is one of the nation’s largest grocers. It has been working to infuse technology into many areas of its business as it faces increasing threats from Amazon.
The company started in Boise in 1939. A previous deal for the company broke it into pieces in 2006. A small group of stores was sold to a new entity based in Boise. Eventually, that group – known as Albertsons LLC, regained the rest of the Albertons stores and then bought Safeway.
The company is one of Idaho’s largest employers. Data from the Boise Valley Economic Partnership indicates it is the fourth largest private provider of jobs in the state, with between 3,000 and 3,999 employees.
Albertsons Companies timeline
1915 – Skaggs Cash Store in American Falls, Idaho by MB Skaggs.
1926 – Skaggs, Safeway merge – the combined company takes Safeway name.
1939 – Albertsons founded in Boise by Joe Albertson, a former Safeway manager – in partnership with LS Skaggs, MB’s brother.
1969 – Albertsons & Skaggs Drug Centers (started by LS Skaggs) form a joint venture for grocery/drug store concept.
1977 – Albertsons & Skaggs Drug Centers part ways amicably.
1978 – Skaggs & American Stores merge, taking the American Stores name.
1999 – Albertsons buys American Stores, and briefly becomes the nation’s largest grocer.
2001 – Larry Johnston hired as Albertsons CEO after a career at GE. Immediately cuts staff by 20%, closes hundreds of stores and pulls out of markets like Houston & New Orleans.
2006 – After Johnston’s efforts fail, a diminished Albertsons is split in three pieces and sold off: Standalone drug stores went to CVS, most grocery stores sold to Supervalu, and a small group of so-called “underperforming” stores sold to Cerberus Capital Mgmt.
2013 – After sputtering, Supervalu sells most of its stores to the Cerberus group.
2015 – Newly reunited Albertsons chain completes purchase of the larger Safeway – making it the nation’s second-largest grocer.
2020 – Albertsons Companies goes public on the NYSE.
The twists and turns of Albertsons
Albertsons’ history gets a bit complicated at times. Joe Albertson founded the chain in Boise in 1939 – and it slowly, steadily grew over the years. In 1999, the company bought Utah-based American Stores and for a time grew to the largest grocer in the nation.
In 2001, Larry Johnston took over as CEO and Chairman. After five tumultuous years, the company sold itself off in 2006. Standalone drugstores went to CVS and rebranded. The bulk of the grocery stores, 1,124, including those in Idaho, were sold to Supervalu. A new company was formed to take over 661 so-called “underperforming” Albertsons stores, led by a consortium of investors led by Cerberus Capital. The Cerberus stores were based in Boise – despite not owning the locations here.
In 2013, after Supervalu struggled with the stores it bought, it sold them to the Cerberus-led company – reassembling the bulk of the grocery company. Headquarters for the company remained in Boise – and now included oversight of the Boise-area stores.
In 2014, Albertsons purchased Safeway – and in the years since worked to transition to many of Safeway’s back office functionality.