Grupo Comercial Chedraui announced that its subsidiary, Bodega Latina Corporation, has entered into a definitive agreement to acquire Smart & Final Holdings, Inc. for approximately $620 million, including the assumption of certain indebtedness.
Headquartered in Commerce, California, Smart & Final is celebrating its 150th anniversary in 2021. The grocery retailer operates 254 stores under two banners: Smart & Final and Smart & Final Extra! in California, Arizona, and Nevada. There are an additional 16 stores in Northwestern Mexico operated through a joint venture.
Smart & Final stores service both household and business customers, representing approximately 70% and 30% of revenues, respectively, and provides one-stop shopping with an assortment of both club and traditionally sized groceries, fresh foods, and supplies without a paid membership.
For the fiscal year ended January 3, 2021, Smart & Final generated U.S. GAAP revenues of approximately $4.1 billion and Adjusted EBITDA of $167 million.
“We are excited about the combination of Grupo Comercial Chedraui and Bodega Latina with Smart & Final, which further scales and expands our U.S. footprint. Additionally, this acquisition is aligned with our long-term strategy to find financially attractive and accretive opportunities while maintaining consolidated indebtedness at prudent ranges,” said José Antonio Chedraui Eguía, CEO of Chedraui.
Grupo Comercial Chedraui, S.A.B. de C.V. is a publicly owned company with variable capital that operates hypermarkets and supermarkets in Mexico and the United States.
“This transaction reflects our continued commitment to serve customers, families, and businesses in both the U.S. and Mexico. It benefits stakeholders in both countries, including our employees, around 40,000 in Mexico and over 13,000 in the U.S., suppliers, vendors, customers, and families. As just one example, via our money remittance partnerships and network of stores, we currently help customers looking to provide support when needed to family living elsewhere. This transaction will only strengthen our ability to provide that type of support and value to many more customers and families,” added Chedraui.
According to the company, the combination creates a leading diversified chain in Mexico and a multi-format food retail platform in the U.S., with consolidated pro forma sales of over $11 billion.
Bodega Latina Corporation, headquartered in Paramount, California, entered the grocery retail marketplace with its first store in South Gate, California, in June of 1997. In 2018, BLC completed the acquisition of Fiesta Mart, a Texas-based food retailer with an emphasis on the Hispanic Segment. BLC currently operates 61 El Super stores, 3 El Super Fresh stores, and 59 Fiesta Mart stores across California, Arizona, Nevada, New Mexico, and Texas.
“Smart & Final, with a unique go-to-market and operating strategy, is an attractive fit that is aligned with our business strategy in the U.S., utilizing differentiated formats to focus on growing but underserved markets,” said Carlos Smith, President and CEO of Bodega Latina. “With a brand that resonates with consumers, geographic fit in key markets and a consistent record of profitable growth, Smart & Final will complement the platform we’ve built with El Super and Fiesta. We look forward to welcoming Smart & Final’s talented team of over 11,000 employees in working together to create a premier food retail platform in our markets.”
After closing, Smart & Final will operate as a separate operating unit within GCC, with limited integration expected. Smart & Final will retain its existing management team to continue to run the business.
David Hirz, Smart & Final’s CEO, said, “The transaction is a testament to the strength of Smart & Final’s franchise, the quality of our store banners, and the talent and expertise that support the business. Under the ownership of Grupo Comercial Chedraui and Bodega Latina, Smart & Final will benefit from their guidance given their recognized and established position in the retail food space while contributing our own best practices and experience. Together we will further accelerate our collective growth. We are excited about the future as we embark on a new chapter in our history with an aligned partner and understands our strengths, culture, and customer-centric philosophy. We want to thank Apollo for its partnership and support in helping us grow our business to where we are today.”