Ahold Delhaize, Centerbridge Complete FreshDirect Acquisition

Following clearance from federal antitrust authorities, Ahold Delhaize and Centerbridge Partners have completed their acquisition of FreshDirect, giving the Dutch retailer a significant player in New York’s five boroughs and another jolt to its fast-growing e-commerce business.

The deal, which was announced in November, brings the New York-based e-commerce pioneer to Ahold Delhaize’s family of brands. The company will retain its brand name and continue to independently operate out its Bronx, N.Y., facility, Ahold Delhaize said.

Financial terms of the acquisition were not disclosed, although sources estimated a price of about $300 million. Ahold Delhaize said it was funding its 80% majority stake with cash on hand. Centerbridge, a New York-based private equity firm, is taking a 20% minority ownership.

“We are very pleased that we can now definitively welcome FreshDirect to our family of great local brands,” Frans Muller, CEO of Ahold Delhaize, said in a release. “This leading local online brand with a large and loyal following will help us reach additional customers in the New York trade area and further propel our omni-channel evolution. We are looking forward to working with our new FreshDirect colleagues.”

FreshDirect has estimated annual sales of about $600 million, sources said. It is particularly popular among residents of Manhattan—a market Ahold Delhaize’s Stop & Shop supermarket banner and its associated Peapod e-commerce business had failed to significantly impact despite leading market share in the greater metro area.

FreshDirect has also been growing in suburban areas in the Northeast and Mid-Atlantic, and can complement existing Ahold Delhaize USA banners there, officials said.

“Today marks the beginning of an exciting new era for FreshDirect. Ahold Delhaize will build on FreshDirect’s success, ensuring the continued growth of our company, while creating synergy and maintaining the uniqueness of the brand,” said FreshDirect CEO David McInerney. “I am thankful to our loyal and devoted customers, many of whom have been with us since the beginning, and very proud of and grateful for the FreshDirect team, which has worked tirelessly over the years to make our company a leader in the field. The entire FreshDirect team looks forward to working together with our new Ahold Delhaize colleagues.”

Steve Silver, senior managing director with Centerbridge Partners, said, “We are excited to start this new partnership with Ahold Delhaize, in which we can utilize our experience in the interplay between logistics facilities and e-commerce fulfillment in order for FreshDirect to grow further.”

FreshDirect was previously supported by a consortium of investors including Brightwood Capital Advisors, Maverick Capital, and W Capital Partners. “We are grateful to our investors for their unwavering support and guidance, and their significant contributions to the company’s leadership position and success,” McInerney said.

“Brightwood has had strong conviction in FreshDirect's growth potential since our initial investment in 2014 and is proud to have served as a long-term partner through multiple rounds of financing,” said Sengal Selassie, Managing Partner and Chief Investment Officer of Brightwood. “Over the course of our investment, we have been pleased to support strategic initiatives, such as the company’s geographic expansion and launch of FreshDirect Express, and look forward to watching it continue to flourish under its new ownership.”

David Singer, Managing Partner, Maverick Ventures, added, “We could not be prouder of the FreshDirect team’s commitment to putting its customer first, demonstrated with intensity during the recent pandemic but obvious every day of our 14-year involvement with the company.  We are excited that they will be able to amplify this approach as part of the Ahold Delhaize family.”

Katie Stitch, Managing Director of W Capital Partners, said, “It has been a privilege to work alongside FreshDirect’s talented management team as it executed on the transformational promise of offering better, fresher food directly to customers. COVID-19 brought new depth to the mission and W Capital couldn’t be prouder of the dedication shown by FreshDirect’s essential team members, both to its customers and to those in need in our community. We look forward to FreshDirect continuing to deliver an unparalleled offering to a growing number of customers under its new ownership.”