Albertsons Companies Announces $1.75 Billion Preferred Equity Investment Led by Apollo Global Management
- by Kayla Webb
BOISE, ID - As one of the industry’s top movers and shakers, Albertsons Companies knows how to keep retail on its toes. Recently, this came in the form of a major investment, with Apollo Global Management purchasing $1.75 billion of convertible preferred stock and a 17.5 percent stake of Albertsons Companies, which will help the grocer build out its long-term growth strategy.
“Albertsons Companies is pleased to work with Apollo and its co-investors. Apollo knows our industry and business model well, given its significant prior history of successful investments in the grocery sector,” said Vivek Sankaran, President and Chief Executive Officer of Albertsons Companies. “We believe the investment led by the Apollo Funds represents a vote of confidence in both our business and our long-term strategy."
According to a press release, following a repurchase of a portion of the common stock owned by Albertsons’ current shareholders, on an as-converted basis the preferred stock will represent approximately 17.5 percent of pro forma common stock outstanding.
Apollo’s investment in Albertsons hits the newswires in the midst of what Reuters has dubbed a “boom” for grocery businesses, as consumers make adjustments to their shopping habits due to COVID-19 that place our industry's goods in high demand. Overall, this investment is expected to keep Albertsons on an upward trajectory.
“We are excited to work with the strong management team at Albertsons Companies, and believe the business has compelling growth opportunities ahead via e-commerce penetration, expansion of the company’s innovative Own Brands portfolio, and merchandising and marketing initiatives,” added Justin Korval, Partner in Apollo’s Hybrid Value Business.
The transaction is expected to close by June 15, 2020, subject to customary closing conditions.
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