Arden Group Inc., parent of Gelson’s Markets, an operator of 17 distinctive, full-service specialty grocery stores in Southern California, has entered into a definitive agreement to be acquired by TPG, the global private investment firm, in an all-cash transaction valued at approximately $394 million. The transaction is expected to close in the first quarter of 2014.
“I am pleased to announce this agreement as it delivers significant value to our shareholders," said Bernard Briskin, chairman, president and chief executive officer of Arden Group. "In addition, it is a clear endorsement of Gelson’s Markets and of the hard work and commitment of our employees with whom I have had the privilege to work with for more than 40 years.”
“Gelson’s Markets is an iconic Southern California supermarket chain that prides itself on offering quality and unmatched customer service,” said Carrie Wheeler, partner at TPG. “We look forward to working with the team to further expand Gelson’s footprint of premier supermarkets.”
The acquisition announcement is the result of a comprehensive process in which Arden Group, with the assistance of its financial advisor, solicited interest in a potential acquisition of the company. The merger agreement was approved by all members of the company’s board of directors that were present and voting at the meeting.
“TPG is a world-class private investment firm and has a strong understanding and appreciation for our brand and our dedication to superior customer service," said Rob McDougall, president of Gelson’s Markets. "We are pleased to partner with TPG and look forward to the next phase of the company’s growth. Gelson’s will continue to provide the highest levels of service to our customers at our same current locations, while looking to offer a remarkable shopping experience in other areas of Southern California.”
The transaction is subject to customary closing conditions, including, among other things, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. There is no financing contingency.
Under the terms of the agreement, Arden Group’s shareholders will receive $126.50 per share in cash for each share of Arden Group’s common stock they hold, representing premiums of approximately 26 percent and 14 percent to the company’s average closing stock prices for the periods ended six months and one day, respectively, prior to the announcement on July 15, 2013 that Arden Group was evaluating strategic alternatives, including a potential sale of the company.