BOISE, Idaho — Albertsons Companies, Inc. (the “Company”) today announced that funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, Inc. (“Apollo”) have led the purchase of $1.75 billion of convertible preferred stock of Albertsons Companies (the “Preferred Stock”). Following a repurchase of a portion of the common stock owned by the Company’s current shareholders, on an as-converted basis the Preferred Stock will represent approximately 17.5% of pro forma common stock outstanding. The transaction is expected to close by June 15, 2020, subject to customary closing conditions.
“Albertsons Companies is pleased to work with Apollo and its co-investors. Apollo knows our industry and business model well, given its significant prior history of successful investments in the grocery sector. We believe the investment led by the Apollo Funds represents a vote of confidence in both our business and our long-term strategy,” said Vivek Sankaran, President and Chief Executive Officer of Albertsons Companies. “We are also proud to have the continued support of our owners, led by Cerberus Capital Management. We appreciate their tremendous support over the years in operations, technology and financing as we have grown our business and our platform, and especially during the COVID-19 pandemic as we focus on the safety and well-being of our associates, customers and communities.”
Justin Korval, Partner in Apollo’s Hybrid Value Business, said, “We are excited to work with the strong management team at Albertsons Companies, and believe the business has compelling growth opportunities ahead via eCommerce penetration, expansion of the Company’s innovative Own Brands portfolio, and merchandising and marketing initiatives. This investment, led by our Hybrid Value team in partnership with our Credit platform, marks the third sizable transaction in the last month and exemplifies the breadth of Apollo’s capabilities and the creative capital solutions we can deliver to great companies.”
PJT Partners and Credit Suisse along with BofA Securities, Goldman Sachs & Co. LLC, J.P. Morgan and Citigroup acted as financial advisors to the Company. Schulte Roth & Zabel LLP and Greenberg Traurig LLP acted as legal advisors to the Company. The Apollo Funds were advised by Barclays, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, Gibson Dunn, and Morgan, Lewis & Bockius.
About Albertsons Companies:
Albertsons Companies, Inc. is one of the largest food and drug retailers in the United States, with both a strong local presence and national scale. Albertsons Cos. operates stores across 34 states and the District of Columbia under 20 well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs.
Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo. Apollo had assets under management of approximately $316 billion as of March 31, 2020 in credit, private equity and real assets funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.apollo.com.
Founded in 1992, Cerberus is a global leader in alternative investing with over $42 billion in assets across complementary credit, private equity, and real estate strategies. We invest across the capital structure where our integrated investment platforms and proprietary operating capabilities create an edge to improve performance and drive long-term value. Our tenured teams have experience working collaboratively across asset classes, sectors, and geographies to seek strong risk-adjusted returns for our investors. For more information about our people and platforms, visit us at www.cerberus.com.
Important Notice Regarding Forward-Looking Statements
This press release contains certain forward-looking statements. Statements that are not historical facts, including statements regarding the Company’s expectations, perspectives and projected financial performance, are forward looking statements. The words “expect,” “believe,” “estimate,” “intend,” “plan” and similar expressions, when related to the Company and its subsidiaries, indicate forward-looking statements. The forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties. The Company cautions that actual results could differ materially from the expectations described in the forward-looking statements. The Company also cautions that undue reliance should not be placed on any of the forward-looking statements, which speak only as of the date of this release. The Company undertakes no responsibility to update any of these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s filings with Securities and Exchange Commission (“SEC”), including the most recently filed Annual Report on Form 10-K, filed with the SEC on May 13, 2020.