Private Equity Firm Buys 17% of Whole Foods
By REUTERS
LOS ANGELES — The private equity firm Green Equity Investors V has bought 17 percent of the grocery chain, Whole Foods Market, for $425 million, sending shares up nearly 22 percent.
Whole Foods — a former Wall Street darling, which thrived before the economic crisis by selling organic, natural and gourmet food at premium prices — has been hit as consumers trade down to lower-priced stores.
The company, based in Austin, Tex., posted fourth-quarter net income of $1.5 million, or a penny a diluted share Wednesday, including 12 cents in total charges related to idle Wild Oats properties; a tax charge; asset impairments and 13 lease terminations of Whole Foods stores in development.
Analysts, on average, were looking for adjusted earnings of 13 cent a share.
It reported net income of $33.9 million, or 24 cents a share, in the year-earlier quarter ended Sept. 30.
Whole Foods bought rival Wild Oats Markets for $565 million last year and the chain had already cut expansion plans and halted its dividend this year.
Sales, including those from divested stores, rose to $1.79 billion from $1.74 billion, but gross profit also declined.
Sales at stores open at least a year rose 0.4 percent.
The company’s shares rose to $12.54 in extended trading from their $10.31 close on Nasdaq. One year ago, the shares were trading at $51.06.
Green Equity Investors V is an affiliate of Leonard Green Partners.
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