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AMSTERDAM and NEW YORK -- Ahold said yesterday that it has come to an agreement on the sale of Williamsville, N.Y.-based Tops Markets, LLC to Morgan Stanley Private Equity in a transaction worth $310 million.
The acquisition is expected to close before the end of 2007, Ahold said.
The divestment of the division, which has experienced disappointing sales of late, was part of the retail conglomerate's strategic review, revealed in November 2006. Last year, ahead of the review, Ahold revealed its intention of exiting the northeast Ohio market, where it had 46 underperforming Tops stores, ultimately selling some and closing the rest by December 2006.
According to a statement from Tops, the sale encompasses the entire business, including assets, liabilities, contractual obligations, and the well-established Tops name, with its new owner continuing to run all of the stores as an ongoing grocery chain.
"Customers and associates should expect uninterrupted operation of the stores during the transition, and stores are expected to remain open for business as usual," the chain said.
In addition, all Tops merchandising, IT, and finance functions are expected to be eventually consolidated in the Buffalo, N.Y. area.
The store at 1854 Empire Boulevard in Webster, N.Y. was the only location not part of the sales agreement, because of the termination of its lease, Tops said.
Throughout the transaction, Morgan Stanley Private Equity worked closely with Frank Curci, who served as c.e.o. of Tops from 2000 to 2003. Curci will likely join Tops' board of directors and head up the transition team during the coming months, according to Morgan Stanley Private Equity.
Max Henderson, e.v.p. and general manager of Tops, said yesterday that he would assist with the transition and then leave the company.
"Tops is a well-regarded grocer with attractive long-term performance, strong employee relationships, and a loyal customer base," noted Morgan Stanley Private Equity managing director and operating partner Gary Matthews in a statement. Matthews added that his company hoped "to continue Tops' tradition of outstanding service to customers and to maintain its position as a leading supermarket in the region."
Supermarket industry veteran Curci most recently served as c.o.o. at Alabama-based Southern Family Markets, a subsidiary of Keene, N.H.-based C&S Wholesale Grocers. He has also held senior leadership positions at Bi-Lo in South Carolina, Edwards Super Food stores on the East Coast, and Mayfair Supermarkets, which operated as Foodtown in New Jersey.
Morgan Stanley Private Equity, part of Morgan Stanley Investment Management's Merchant Banking Division, makes private equity and equity-related investments worldwide.
Originally founded as a local grocery chain in the early 1960s in Buffalo, Tops was acquired in 1991 by Ahold, which integrated the grocer's finance, IT, and merchandising departments into Carlisle, Pa.-based Giant-Carlisle in 2003. Tops is now made up of 71 company-owned and five franchise supermarket grocery stores in western New York; midstate New York, including Rochester; and northwestern Pennsylvania under the banners of Tops Markets and Martin's Super Food Stores. The company employs over 10,000 associates.