One of the largest organic grocery stores was just acquired for $1.3 billion, and it's plotting an empire

Apollo to Buy Fresh Market for $1.36B
Apollo to Buy Fresh Market for $1.36B

Specialty grocery chain The Fresh Market Inc. has agreed to be acquired by an affiliate of Apollo Global Management for $1.36 billion.

Apollo Funds will pay $28.50 per share, about 24% more than Fresh Market's closing share price Friday, and about 53% more than the closing share price on Thursday, the day before speculation about a potential transaction began.

"We are delighted about this transaction with The Fresh Market, which was one of the early pioneers in small-box grocery, offering unique, delicious and healthy food with a keen focus on perishables," Andrew S. Jhawar, head of the retail and consumer group at Apollo, said in a statement.

Fresh Market has been growing its store count in recent months, but failed in efforts to expand into California.

Fresh Market was founded in Greensboro, North Carolina, in 1982 as an American take on the "European style market, " selling fresh meats, fruits, and vegetables with an open-air feel. There are 186 Fresh Market locations in 27 states.

In October, Fresh Market announced it was considering a possible sale because of a sales slump. The company has struggled to compete with chains such as Kroger, Costco, and Walmart, as the grocery and retail chains have begun offering organic products at lower price points.

In February, reports emerged that Kroger was considering purchasing Fresh Market, following the company's acquisitions of grocery chains Roundy's in 2015 and Harris Teeter in 2014.

According to Apollo, the deal is expected to close in the second half of 2016.

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Originally published