An affiliate of Apollo Global Management has bought an Ontario-based Hispanic supermarket chain that just inked a deal to increase its holdings in the Inland Empire.
Apollo Funds, a unit of the New York-based private equity firm, has purchased Cardenas Markets for an undisclosed sum. The seller was KKR, a New York-based private equity firm that bought the market chain in 2016 from the Cardenas family.
The transaction is expected to be completed this fall.
Upon its completion, Apollo plans to combine Cardenas, which operates in California, Nevada and Arizona, with Tony’s Fresh Market, a Chicago-based portfolio company, to create a leading Hispanic and ethnic grocer.
The combined Cardenas-Tony’s will number nearly 80 stores across the West and Midwest, with about $1.8 billion in combined revenues, according to Apollo.
“Together, as two of the highest quality Hispanic and ethnic grocers, we can deliver even greater value to the communities we serve,” said Cardenas CEO Doug Sanders, in a statement.
Both companies are expected to continue to operate under their respective brands and local leadership, while benefiting from greater scale. Sanders will serve as CEO of the combined company and Cardenas chain, while Frank Ingraffia will continue to serve as the CEO of the Tony’s chain.
Founded in 1981, Cardenas is already among the largest Hispanic grocery chains in the country, with 59 stores and products from more than 500 vendors. While under KKR, it doubled in size through both organic growth and strategic acquisitions.
The merger announcement on Monday came days after Cardenas Markets announced it was buying six Hispanic grocery stores in the Inland Empire.
Cardenas struck a deal with Fontana-based Rio Ranch Markets to buy its food store chain, the San Bernardino Sun reported. Terms of the sale were not disclosed.
The company will assume operations of Rio Ranch markets in Chino, Banning, Fontana, Perris, Jurupa Valley and San Bernardino. The transaction is expected to close by mid-July.
Sanders said the acquisition “further solidifies the company’s position as one of the leading Hispanic supermarket chains in the country.”
“As we look ahead, we will continue to identify strategic opportunities to grow our business, while providing a fresh and authentic shopping trip for our customers,” Sanders said in a statement.
The Rio Ranch stores will operate as normal as they’re gradually incorporated into Cardenas Markets, the company said.
Cardenas operates 51 stores under the Cardenas Markets banner, seven under the Los Altos Ranch Markets name and one as Cardenas Ranch Markets.
As of March 31, Apollo had approximately $513 billion of assets under management.
In 2011, Apollo bought a majority stake in Phoenix-based Sprouts Farmers Markets, which it merged with its Irvine-based Henry’s Farmer’s Markets to create a combined grocery chain of nearly 100 stores.
Doug Sanders, who’d led the fast-growing Sprouts since it was founded in 2002, stepped down as executive chairman in 2017, and later led Cardenas Markets.