Private equity firm Apollo Global Management Inc. is exploring a sale of the warehouse store business of Smart & Final Stores LLC, the U.S. food retailer it acquired in June, people familiar with the matter said on Friday.
Apollo is seeking more than $1 billion for the business, close to the price tag of $1.1 billion, including debt, it paid for the entirety of Smart & Final six months ago, the sources said. The sale would exclude Smart & Final’s discount grocery store business, which is less lucrative, the sources added.
Apollo has hired Credit Suisse Group AG and Deutsche Bank AG to run an auction for the division, Smart & Final Foodservice, which has about 70 warehouse stores, according to the sources.
The New York-based buyout firm hopes the business, which has 12-month earnings before interest, taxes, depreciation and amortization of more than $80 million, will attract the acquisition interest of major food retailers and distributors, the persons said.
The sources asked not to be identified because the matter is confidential. Apollo, Credit Suisse and Smart & Final declined to comment, while Deutsche Bank did not respond to a request for comment.