Apollo Funds announced the acquisition of Cardenas Markets, a leading supermarket chain focused on serving the Hispanic community, owned by KKR, a leading global investment firm.
According to a company statement, upon completion of the transaction, Apollo Funds will combine Tony’s Fresh Market, a Chicago-based portfolio company, with Cardenas Markets, which operates across California, Nevada, and Arizona, to create a leading Hispanic- and ethnic-focused grocer.
Both companies will continue to operate under their respective brands and local leadership while benefitting from greater scale, complementary capabilities, and an expanded operating footprint.
Founded in 1981, Cardenas is one of the largest Hispanic grocery chains in the country with a differentiated store concept providing high-quality, specialty groceries at affordable prices.
The combined Cardenas-Tony’s footprint will span nearly 80 stores across the western and mid-west United States with approximately $1.8 billion combined revenues. The company, led by CEO Doug Sanders, operates 59 stores and sources products from over 500 vendors. Sanders will serve as CEO of the combined company and Cardenas chain, while Frank Ingraffia will continue to serve as the CEO of Tony’s chain.
Last week, Cardenas Markets announced the acquisition of six Rio Ranch Market stores in Southern California.
Cardenas Markets will gradually integrate the six stores into their operations. The company expects the transaction to close by mid-July 2022.
“Since joining Cardenas, we have made great progress in growing and enhancing our operations with KKR’s support. I am thrilled by the opportunity for our team to partner with Frank and the Tony’s team, leveraging our collective strengths. As two of the highest quality Hispanic and ethnic grocers, we can deliver even greater value to the communities we serve,” said Doug Sanders, CEO of Cardenas. “Apollo private equity has an extensive best-in-class track record of success in food retail. I am thrilled to partner with Andy Jhawar and the Apollo team again in this exciting next chapter for Cardenas. I would also like to thank KKR, which has been a tremendous strategic partner over the past six years, helping us grow and professionalize the business.”
Andrew Jhawar and Joanna Reiss, Apollo Private Equity Partners, said: “Cardenas has grown significantly over the last several years under Doug’s leadership, and we are excited to accelerate its growth in combination with Tony’s in this next phase. We are excited to once again partner with Doug following our highly successful investment in Sprouts Farmers Market, which Doug led as CEO under Apollo funds’ ownership. Cardenas and Tony’s have robust positions in the ethnic grocer space and together can leverage best practices across their complementary go-to-market strategies, merchandising, customer loyalty programs, and more. This transaction will combine the best of both retailers and provide greater opportunities and scale for the respective brands and teams as they continue to bring quality, affordable groceries to diverse communities.”
In 2016, KKR acquired Cardenas Markets from the Cardenas family to transform the business into a growth platform. Under KKR’s ownership, Cardenas doubled in size through organic growth and strategic acquisitions.
“We immensely appreciate everything Doug and the management team have done to build a great company dedicated to bringing fresh and affordable groceries to the communities it serves, consistent with the values that the Cardenas family instilled in the business. We are confident that Apollo and Tony’s Fresh Market are the right partners for Cardenas as it enters its next chapter of growth,” said Vishal Patel, a Managing Director at KKR.
The transaction is subject to customary closing conditions and is expected to be completed by Q3 2022. The financial terms of the transaction were not disclosed.