| NEW YORK, June 16
NEW YORK, June 16 Discount supermarket chain
Grocery Outlet is exploring a sale that is expected to value the
bargain retailer at more than $1 billion, according to people
familiar with the matter.
Grocery Outlet's private-equity owner, Berkshire Partners
LLC, has hired Barclays and Goldman Sachs to run
a sale process for the Berkeley, California-based food market
chain, the people said on Monday.
Grocery Outlet bets on U.S. consumer frugality in lean
economic times, offering about half off traditional supermarket
prices by selling manufacturers' excess inventory.
All the people asked not to be named because the matter is
not public. Representatives for Grocery Outlet and Goldman Sachs
did not immediately respond to requests for comment. Berkshire
Partners and Barclays declined to comment.
Supermarket deals have been on the upswing, with Kroger Co
purchasing Harris Teeter last year and private-equity
firm Cerberus Capital Management LP striking a $9 billion deal
for Safeway Inc.
Grocery Outlet has about $100 million in earnings before
interest, tax, depreciation and amortization and could sell for
more than 10 times that figure, some of the people said.
Grocery Outlet has more than 180 stores in Pennsylvania and
several states in the Western United States including
California, Washington and Oregon.
Founded by Jim Read in San Francisco in 1946, the chain
initially sold government-surplus canned goods. Read's grandson,
MacGregor Read, is currently co-CEO of the company.
In the past decade, Grocery Outlet has evolved into carrying
a full line of groceries, including fresh items including
produce, meat and milk. Organic goods and beer and wine are
fast-growing categories within the retailer.
(Additional reporting by Greg Roumeliotis and Olivia Oran in
New York; editing by Matthew Lewis)