Apollo to acquire Cardenas Markets, combine with Tony’s Fresh Market

Apollo Funds has agreed to acquire Cardenas Markets, an Ontario, Calif.-based grocer serving the Hispanic community.

The alternative asset manager, with global headquarters in New York City, will acquire the retailer from investment funds affiliated with KKR, a global investment firm, according to a news release.

When the transaction is complete, Apollo Funds will combine Tony’s Fresh Market, a Chicago area-based portfolio company, with Cardenas Markets, with stores across California, Nevada and Arizona.

Both companies will continue to operate under their respective brands and local leadership, while benefitting from greater scale, complementary capabilities and an expanded operating footprint.

Founded in 1981, Cardenas is one of the largest Hispanic grocery chains in the U.S., with a differentiated store concept focusing on high-quality, specialty groceries at affordable prices. The company, led by CEO Doug Sanders, today operates 59 stores and sources products from more than 500 vendors.

The combined Cardenas-Tony’s footprint will span almost 80 stores across the West and Midwest U.S., with about $1.8 billion in combined revenues, according to the release.

Sanders will serve as CEO of the combined company and Cardenas chain, while Frank Ingraffia will continue to serve as the CEO of the Tony’s chain.

“Since joining Cardenas, we have made great progress in growing and enhancing our operations with KKR’s support, and I am thrilled by the opportunity for our team to now partner with Frank and the Tony’s team, leveraging our collective strengths,” Sanders said in the release.

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Cardenas has grown significantly over the last several years under Sander’s leadership, Apollo private equity partners Andrew Jhawar and Joanna Reiss said in a joint statement.

This is another partnership with Sanders. Previously, Apollo equity partners invested in Sprouts Farmers Market, which Sanders led as CEO under Apollo Funds’ ownership.

“This transaction will combine the best of both retailers and provide greater opportunities and scale for the respective brands and teams as they continue to bring quality, affordable groceries to diverse communities,” Jhawar and Reiss’ said in their statement.

In 2016, KKR acquired Cardenas Markets from the Cardenas family with the understanding it would be transformed into a growth platform. Under KKR’s ownership, Cardenas doubled in size through a combination of organic growth and strategic acquisitions, according to the release.  

The transaction should be complete by the third quarter of 2022. Financial terms were not disclosed.