Goodbye Henry’s Markets! Sprouts Farmers Market Surfaces From Merger

For those who have had to struggle with their natural-food-shopping choices, the choice will soon be a little less taxing. Today serves as a big day in the natural food game, with heavyweights Sprouts Farmers Market and Henry’s Farmers Market announcing an agreement to combine their operations under the ownership and sponsorship of Apollo Management, one of the world’s leading private equity firms.

The Boney family has had their hands in both companies over the years, but the combined company will operate under the Sprouts Farmers Market name and will be one of the largest players in the fast-growing “farmers market” arena. The transaction between the two companies is expected to close early in the second quarter 2011. The combined company plans to open up 10 additional new stores during 2011, along with their standing 98 stores and more than 7,000 employees.

Here’s the release from a specially launched website the joint companies have put together:

Sprouts Announces Combination
with Henry’s, Creating Leading Farmers Market
Specialty Retailer

February 16, Phoenix, AZ —

Sprouts Farmers Market (“Sprouts”) and Henry’s Farmers Market (“Henry’s”), two companies originally founded by the Boney Family that have operated under separate owners for almost a decade, announced the execution of definitive agreements to combine operations under the majority ownership and sponsorship of Apollo Management, L.P., one of the world’s leading private equity firms.

The combined company will operate under the Sprouts Farmers Market name and will be one of the largest players in the exciting, fast-growing “farmers market” specialty segment of the retail food industry, as well as one of the largest grocers in the Western U.S. with annual revenues in excess of $1 billion. The transaction is expected to close early in the second quarter 2011.

The combined company will be managed from an operating perspective by the Boney family and will eventually operate all stores under the single name Sprouts Farmers Market. The new company will have 98 stores and more than 7,000 employees at the time the transaction is closed. The combined company plans to open up to 10 additional new stores during 2011.

Andrew S. Jhawar, a Senior Partner at Apollo and Co-Head of Apollo’s Consumer and Retail Industry Group said, “We are very excited about partnering with Stan Boney, Shon Boney, Doug Sanders and the thousands of employees at Sprouts and Henry’s to help reunite these two great companies under the Boney family’s leadership. After the combination, Sprouts will be one of the largest, growth oriented specialty retailers in the U.S. with a focus on natural and organic products. Apollo looks forward to supporting the management team’s vision for significant future new store growth across the country.”

Stan Boney, Chairman of the Board at Sprouts said, “The combination of Sprouts and Henry’s is an exciting chapter in our family’s lives, and we look forward to continuing to deliver on our mission of helping America eat healthier, live longer and spend less. Apollo is one of the most experienced and successful private equity firms in the nation and we are excited about their support for our business model and look forward to working together with Andy and his team.”

The combination of the Sprouts and Henry’s businesses will occur through an equity investment and recapitalization of the existing Sprouts business by Apollo. A concurrent purchase of the Henry’s business will be made from Commerce, California based Smart & Final Holdings Corp., an Apollo portfolio company since 2007. Following the transaction, Apollo will be the majority owner of Sprouts and will continue to be the principal equity owner of Smart & Final Holdings.

As closely held companies, neither Sprouts nor Henry’s discloses financial information. Terms of the transaction weren’t disclosed.