Grupo Comercial Chedraui’s Bodega Latina to acquire Smart & Final for $620m

Grupo Comercial Chedraui, a Mexican grocery store chain, through its subsidiary Bodega Latina Corporation, has agreed to acquire Smart & Final Holdings for around $620 million.

The sellers of the US-based warehouse-style food and supply stores chain are funds managed by affiliates of Apollo Global Management.

The consideration includes the assumption of certain indebtedness.

Based in Los Angeles, Smart & Final operates over 250 grocery and foodservice stores across California, Nevada, and Arizona under the banners – Smart & Final and Smart & Final Extra! The retailer has 16 more stores in Northern Mexico, which are operated via a joint venture.

For the fiscal year ended 3 January 2021, Smart & Final earned revenues of around $4.1 billion.

On the other hand, Bodega Latina, which does business as El Super, has stores across California, Nevada, Arizona, New Mexico, and Texas.

Grupo Comercial Chedraui’s Bodega Latina to acquire Smart & Final for $620m. Photo courtesy of Nandaro/Wikipedia.org.

José Antonio Chedraui Eguía – CEO of Grupo Comercial Chedraui said: “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. This acquisition is aligned with our long-term strategy to find financially attractive and accretive opportunities, while maintaining consolidated indebtedness at prudent ranges.

“With financing for the transaction occurring at the BLC level, GCC retains ample financial flexibility for continued growth in Mexico as well. More fundamentally, this transaction reflects our continued commitment to serve customers, families and businesses in both the U.S. and Mexico.”

After the closing of the deal, Smart & Final will operate as an independent operating unit within Grupo Comercial Chedraui, with limited integration expected.

David Hirz – Smart & Final CEO said: “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 food retail 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 a partner that is aligned and understands our strengths, culture and customer-centric philosophy.”

The deal, which is subject to regulatory approvals in the US and Mexico and other customary closing conditions, is expected to be wrapped up in Q2 or Q3 2021.