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Sprouts Farmers Market and Sunflower Farmers Market have agreed to merge, a move that will bring together 139 stores and 10,000 employees under the Sprouts banner by the end of the year.
Expected to be finalized during the second quarter of 2012, the merger of the Phoenix-based independent natural food store chains expands Sprouts’ geographic footprint to Nevada, Utah, New Mexico and Oklahoma with Sunflower’s 35 stores and further extends its presence in California, Arizona, Colorado and Texas. Overall, the combined company – which plans to open up to 13 new stores this year – will be a prominent player in the Western U.S. grocery market, with projected 2012 annual revenues approaching $2 billion.
Majority-owned by investment funds affiliated with Apollo Global Management LLC, Sprouts is operated by the Boney family and an executive team with many years of collective experience in the grocery business. Sunflower, co-founded in 2002 by Libby Cook and Randy Clapp, is privately owned by the co-founders, management and KMCP Advisors, a provider of private expansion capital. The combined company will continue to be majority-owned and controlled by Apollo.
“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,” said Andrew S. Jhawar, a senior partner at Apollo and co-head of its consumer and retail industry group. “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. This is a combination that makes great sense, given the rapid growth in demand for natural and organic products and the complementary nature of the geography of the two companies.”
Stan Boney, Sprouts chairman of the board, added: “Andy and the team at Apollo have been very supportive in helping us to continue to grow our company. Sprouts is now making a meaningful contribution to the lives of almost 10,000 employees and millions of customers, who appreciate the value offered in our stores. Sprouts has come a long way from its beginning only 10 years ago.”
Chris Sherrell, Sunflower president and CEO, called the merger an exciting development. “Over the past 10 years, both Sprouts and Sunflower have offered healthy food at a great value, while providing a friendly shopping experience in an easy-to-navigate store format,” Sherrell said. “Merging the resources and talents of both companies means we’ll be able to accelerate new store growth and optimize our offerings. I’m confident that both Sunflower and Sprouts customers and employees will be impressed with the evolution and advancement our companies can achieve together.”
Sprouts traces its lineage back to Henry Boney, a San Diego entrepreneur who in 1943 opened a fruit stand. Over the years, he and his family started and sold many retail businesses, including Speedee Mart, Boney’s and Windmill Farms. The second generation of Boney’s stores were opened in 1969 by Henry’s sons, Stan, Steve and Scott. The name was changed to Henry’s Marketplace in 1997; the Boney family ran Henry’s until 1999, when the stores were sold to Wild Oats Markets Inc., which later sold them again.
Henry’s son, Stan, and his grandson, Shon, along with family friends Kevin Easler and Scott Wing, returned to the natural foods business in 2002 when they opened the first Sprouts Farmers Market store in Chandler, Ariz. Sprouts grew rapidly, and just 10 months ago reunited with Henry’s in a merger sponsored by Apollo. Sprouts currently operates 104 stores across Arizona, California, Colorado and Texas, including two stores that still operate under the Henry’s name.
Sunflower was originally co-founded in 2002 by Libby Cook and Randy Clapp, also co-founders of Wild Oats. Sunflower grew rapidly in New Mexico, Colorado and Arizona, and eventually pushed into new markets such as Nevada, Utah, Texas, Oklahoma and California.
“Given our continued growth,” Stan Boney said, “I can’t help but think about how my father would have reacted. He would certainly recognize his handprint in both Sprouts and Sunflower, and I think he’d be amazed at everything that we’ve been able to accomplish in such a short time.”