PHOENIX — Independent natural food chains Sprouts Farmers Market and Sunflower Farmers Market on Friday said they have reached a definitive agreement to merge.
The combined company will operate 139 stores under the Sprouts Farmers Market name and will have approximately 10,000 employees and approaching $2 billion in annual sales. The transaction is expected to close in the second quarter of 2012. Financial terms were not disclosed.
The addition of Sunflower’s 35 stores expands Sprouts’ geographic footprint to Nevada, Utah, New Mexico and Oklahoma and further extends its presence in California, Arizona, Colorado and Texas. Overall, the combined company plans to open up to 13 new stores during 2012.
It is expected that all of the Sunflower stores will be rebranded under the Sprouts banner by the end of 2012.
Sprouts, based here, is majority-owned by investment funds affiliated with Apollo Global Management and is operated by the Boney family. Boulder, Colo.-based Sunflower, co-founded in 2002 by Libby Cook and Randy Clapp, is privately owned by the co-founders, management and KMCP Advisors, a provider of private expansion capital. Sagent Advisors was the financial adviser to Sunflower in the sale.
The combined company be majority-owned and controlled by Apollo.
Andrew S. Jhawar, a senior partner at Apollo and co-head of Apollo's Consumer and Retail Industry Group, said, "We feel incredibly fortunate to be able to bring together the management and operations of these two growth-oriented grocery retailers who focus on natural and organic products. In doing so, Sprouts will become an even better company offering more value to the nearly 1.5 million customers who regularly shop at the combined company’s stores. This is a combination that makes great sense given the rapid growth in demand for natural and organic products and the complementary nature of the geography of the two companies."
Apollo last year sponsored Sprouts’ takeover of Henry’s Farmers Markets.