The Fresh Market (TFM) to Be Acquired by Apollo Global for $1.36B

Shares of The Fresh Market Inc. (TFM) were trading up +5.40 or +23.5 percent to $28.38 per share in Monday’s premarket after news that the company had accepted a bid to be taken over by Apollo Global Management, LLC (APO). The Fresh Market shares closed at $22.98, up +0.76 or +3.42 percent in Friday’s regular trading session.

Founded in 1982 by Ray and Beverly Barry, Greensboro, North Carolina based The Fresh Market Inc. is an upscale grocery store chain focusing on high quality food products with a high level of customer service.
The company operates 186 stores in 27 states with the majority of its stores located in North Carolina, Florida and Georgia. Fresh Market had its initial public offering in November of 2010 at $22 per share and employs approximately 6,200 people.

New York City based Apollo Global Management, LLC was founded by former Drexel Burnham Lambert investment banker Leon Black in 1990. The company focuses on buying distressed companies through leveraged buyouts, special situations and corporate restructuring. Apollo has approximately $170 billion in assets under management, invested primarily in credit and real estate funds and private equity. The company invests in a core group of nine industries in which the company has significant knowledge and resources.

The definitive agreement, announced early this morning will have an affiliate of Apollo Global Management, LLC pay $28.50 per share in cash for all outstanding shares of The Fresh Market. The deal is valued at approximately $1.36 billion and represents a premium of about +24 percent over The Fresh Market stock’s closing price on Friday, or +53 percent over the stock’s closing price on February 10th, when a potential transaction was first announced in the press.

The Fresh Market's President and Chief Executive Officer, Rick Anicetti stated in the company’s press release that, “We are excited about this transaction with Apollo, which recognizes the value of The Fresh Market's strong brand and significant growth prospects while providing stockholders with an immediate and substantial premium. Apollo is a highly-regarded investor, bringing deep industry expertise and financial resources, and we look forward to working with them to build on our progress in achieving our strategic plan to deliver long-term profitable growth.”

The transaction was unanimously approved by the Board of directors of The Fresh Market with the exception of founder and Chairman Ray Barry. Barry recused himself from any discussions with the Board in relation to the review and from the Board vote that approved the transaction.

Ray and Brett Barry collectively own 9.8 percent of The Fresh Market’s outstanding shares and have agreed not to tender their shares in the current offer. Instead, they will both participate and rollover the majority of their stakes in the Apollo transaction.

The transaction is expected to close by the second quarter of 2016 and is subject to the customary regulatory and other closing conditions including the minimum tender condition. The minimum tender condition requires that more than 50 percent of outstanding common shares — besides the shares owned by Ray and Brett Barry which are being rolled over — be tendered. Investors are showing their approval for the deal, taking The Fresh Market stock to just under the tender price in this morning’s premarket, while Apollo shares are up over five percent before the market open.

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Published on Mar 14, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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