Ukrop Sells 25 Stores To Giant-Carlisle for $140M

Right on the heels of setting up shop in London, Harris Williams & Co. has brokered a European deal.
The Richmond, Va., investment bank announced Friday that Chris Williams, Derek Lewis, John Klim, and Nathan Dapeer advised on Ukrop's Super Markets Inc.'s sale of 25 stores to Giant-Carlisle for $140 million.
Giant-Carlisle, officially known as Giant Food Stores LLC, is a division of Ahold USA Inc. of Quincy, Mass., itself a unit of Dutch supermarket conglomerate Royal Ahold NV of Amsterdam.
"This acquisition is part of Ahold's profitable growth strategy. Ukrop's is a great company with a strong heritage in an attractive market," Ahold CEO John Rishton said in a statement.
Royal Ahold announced the deal Dec. 17. It is expected to close in the next quarter.
Ukrop's, a family-owned 28-store chain in central Virginia founded in 1937, first began to circulate a prospectus to interested buyers around July 15, according to trade publication Food World.
"The family came to the realization that the grocery industry has changed a lot in the last decade and become increasingly competitive," Harris Williams director Derek Lewis said. "To be able to buy more cost-effectively and to be able to offer lower prices was one of the key considerations."
Ukrop's CEO Bobby Ukrop will retain his company's baked goods and kitchen operations and become an Ahold supplier in Richmond.
Lewis said a small auction was conducted but declined to identify other bidders.
"We went through a small group of strategic buyers we thought would have an interest in these assets. It was a very targeted process," he said.
Royal Ahold finished a major divestiture effort in early 2008 that raised €3.1 billion ($4.4 billion), significantly more than the €2.5 billion that the company pledged in November 2003.
When the program began, Ahold was on the brink of implosion, with observers dubbing it "Europe's Enron." The company had admitted overstating earnings by $1 billion at its U.S. Foodservice Unit. For 2002, Ahold posed a €1.2 billion loss on €63 billion in sales and was carrying €12.3 billion in debt.
The asset sales were spread across 28 countries worldwide. They included sales of Ahold's U.S. subsidiary chains Bi-Lo and Bruno's to Dallas-based Lone Star Funds for $660 million, Brazilian retail chain G. Barbosa to Washington buyout firm Acon Investments LLC for an estimated $550 million in January 2005, and its money-losing Hypermarkets in Poland to France's Carrefour SA for $499 million in December 2006.
On Dec. 10 Harris Williams opened up a London subsidiary, Harris Williams & Co. Ltd., in a calculated move to take advantage of the pickup in economic and M&A activity.
"[The Ahold deal] is indicative of a lot of trends that we're seeing with the middle market becoming more and more global. Going forward, the London office will be a great access point for Harris Williams into Europe," Lewis said.
Ukrop's didn't return calls. Ahold officials could not be reached.