Apollo Global Management has officially agreed to acquire Cardenas Market, a Hispanic grocery chain, from an investment fund under global firm KKR—perhaps indicating a move to dominate the ethnic grocery market.
Investment firm KKR bought Ontario-based Cardenas Market in 2016 from the Cardenas family. Now, they’ve agreed to sell to New York-based Apollo Global Management, also called Apollo Funds. The terms of the acquisitions were not disclosed. Cardenas Market has 59 stores operating in California, Nevada, and Arizona. Of those stores, 51 operate under the Cardenas Markets banner, seven stores operate under the Los Altos Ranch Markets banner, and one additional store under the Cardenas Ranch Markets banner. Apollo Funds also purchased Tony’s Fresh Market, a grocery store chain offering ethnic foods with 18 locations in the Chicago area. The two companies will continue to operate under their respective brands, but will mutually benefit from strong leadership that can expand their footprints, according to a press release from Apollo.
Additionally, Cardenas Chief Executive Officer and grocery veteran Doug Sanders, former CEO of Sprouts Farmers Market, will take the helm of both companies while Frank Ingraffia, Tony’s CEO, will retain his role as well. Sanders previously worked with Solomon Partners and aided in the merger of Sprouts, Sunflower Markets, and Henry’s in 2012, which turned Sprouts into a multibillion-dollar company. The combined revenue of Cardenas and Tony’s is expected to be over $1.8 billion.
Supermarket News posits that Apollo is positioning itself to become a major player in ethnic and health food grocery markets. In addition to acquiring Cardenas, they recently announced another deal to acquire Rio Ranch Market, which boasts six stores in the Southern California area.
“Cardenas and Tony’s have robust positions in the ethnic grocer space,” said Andrew Jhawar and Joanna Reiss, partners at Apollo Funds, in a joint statement. “Together they can leverage best practices across their complementary go-to-market strategies, merchandising, customer loyalty programs, and more.”