Hellman & Friedman to Complete Exit of Grocery Outlet

Hellman & Friedman, the private investor that acquired Grocery Outlet in 2014 and benefitted spectacularly from gradually selling its shares on the public markets, has elected to distribute its last remaining shares to the retailer’s equity holders.

“The ongoing reduction of Hellman & Friedman’s ownership stake has been a natural and expected part of Grocery Outlet’s maturation as a publicly traded corporation. Hellman & Friedman has been a valued partner since their original investment in our company in 2014,” Grocery Outlet CEO, Eric Lindberg said in a statement. “Over that time, we have expanded our leadership team and strengthened our supply chain and corporate infrastructure in order to support our long-term growth objectives.”

Grocery Outlet went public last June on the Nasdaq market when Hellman & Friedman unloaded 17.1 million shares at an IPO price of $22 per share that rapidly soared past $30. The investor has drawn down its holdings several times since then. The sale announced this week will release 9.6 million shares or approximately 11% of its common stock.

Behind healthy comparable-store sales growth reflecting growing demand for discount groceries, a long runway for new stores and a profitable model that passes company-bought merchandise to independent store operators who sell on consignment, Grocery Outlet stock is up by 11% on the year.

“We continue to believe that Grocery Outlet is an exceptional company with a resilient business model and significant long-term growth potential. We have worked closely with the management team since our initial investment and have great confidence in their ability to achieve ongoing success,” said Grocery Outlet Chairman Erik Ragatz, a partner in the Hellman & Friedman.