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Sprouts natural-food markets to expand through merger

March 09, 2012|By Stuart Pfeifer
(Sprouts Farmers Market )

Sprouts Farmers Market has agreed to merge with the Sunflower Farmers Market chain, creating one of the largest natural-food grocery chains in the West, the companies announced.

The combined company will operate 139 stores in eight states under the Sprouts name and will have about 10,000 employees. The transaction, which still requires regulatory approval, was expected to close this summer, with all Sunflower stores branded as Sprouts by the end of the year.

By adding Sunflower’s 35 stores, Sprouts would expand its reach to Nevada, Utah, New Mexico and Oklahoma. It already operates 60 stores in California plus additional stores in Arizona, Colorado and Texas.

Sprouts said it expects annual sales to reach $2 billion in 2012. Sprouts is majority-owned by investment funds affiliated with Apollo Global Management.

In an announcement on Sprouts’ website, the company said the merger would likely lead to reduced prices by creating better access to suppliers and through efficiencies in purchasing and distribution. The company said it has no plans to close any stores.

Andrew S. Jhawar, co-head of Apollo's retail group, said, "We feel incredibly fortunate to be able to bring together the management and operations of these two growth-oriented grocery retailers who focus on natural and organic products.  In doing so, Sprouts will become an even better company offering more value to the nearly 1.5 million customers who regularly shop at the combined company’s stores.”

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