El Super to Acquire Fiesta Mart

Bodega Latina Corp., doing business as El Super—a Hispanic grocer and subsidiary of Mexico's Grupo Comercial Chedraui S.A.B. de C.V.—is acquiring Fiesta Mart, a Houston-based international food retailer, in a push to expand its reach in the Latino grocery sector.   

Fiesta operates 63 stores primarily in the Dallas and Houston areas, with a focus on Hispanic offerings. The transaction will create one of the largest Hispanic-focused supermarket companies in the U.S., with a total of 122 stores across California, Arizona, Nevada, New Mexico and Texas—where more than 50% of the Hispanic population lives—with revenues of approximately $3 billion, according to company officials.

The transaction is expected to close at the beginning of the second quarter of 2018, subject to customary closing conditions. Fiesta stores will continue to be operated under their own banner.

"Combining the strengths of Bodega Latina with those of Fiesta will accelerate the evolution and growth of Fiesta through combining the parties’ scale, geographic reach, talented teams and market knowledge,” said Sid Keswani, CEO of Fiesta, in a statement. 

Fiesta was acquired nearly three years ago by the private-equity firm Acon Investments.

With the rising population and purchasing power of the Latino demographic in the U.S., retailers have been racing to tap into the fast-growing grocery sector through acquisitions and Hispanic-focused store expansions. Southeastern Grocers last week announced the expansion of its Fresco y Mas banner with three new stores in Florida, and in November, Albertsons Cos. acquired an equity stake Latino grocery chain El Rancho Supermercado.

Related:Southeastern Grocers Readies for 3 New Fresco y Mas Openings

The acquisition of Fiesta allows El Super to expand into Texas through a well-established supermarket operator, said Carlos Smith, president and CEO of Paramount, Calif-based Bodega Latina. “Through the combination of the strengths of our two organizations, we will be well positioned to significantly accelerate our vision of efficiently offering high-quality products at the lowest possible prices,” he said. “We believe this transaction will be beneficial for all of our stakeholders, including customers, suppliers, employees and vendors.”

RBC Capital Markets LLC served as the exclusive financial advisor  to Bodega Latina, and Sidley Austin LLP served as legal advisor. The Food Partners LLC served as exclusive financial advisor and Hogan Lovells U.S. LLP served as legal advisor to Fiesta.