Ahold to purchase Ukrop’s for $140 million
- December 17, 2009
Ukrop’s Super Markets Inc., Richmond’s home-grown, family-owned grocery chain, will be sold for $140 million to Giant-Carlisle, a division of the Dutch supermarket group Ahold.
Ahold owns the Giant grocery-store chain, which has stores throughout the Washington, D.C., region. Giant-Carlisle is buying 25 Ukrop’s stores employing 3,900 workers in the Richmond area and Williamsburg. The Ukrop’s store in Fredericksburg will be closed, and the company will help employees there find jobs.
“They plan to make minimal changes,” said Robert “Bobby” Ukrop, the chairman, president and CEO of Ukrop’s. “Our stores will remain operating as Ukrop’s for the short term.”
The deal is expected to close in the first quarter of next year.
The Giant-Carlisle Division, based in Carlisle, Pa,. operates 152 stores in Pennsylvania, Virginia, Maryland and West Virginia under the names of Giant and Martin’s. “The Ukrop’s brand is a well-recognized and well-known brand,” said Rick Herring, the president of Giant-Carlisle. “We look forward to building on that brand.”
The Ukrop’s family plans to create an independent business based on the grocery chain’s bakery and prepared foods operations. It will primarily serve Giant and Martin’s stores.
The family’s foundation will continue to support Richmond-area community events, including an annual 10-kilometer race on Monument Avenue in Richmond and the city’s Christmas parade. Giant-Carlisle also is active in communities that its operates in, officials said. Its philanthropy is focused on the well-being of children and eradicating hunger.
Bobby Ukrop and his older brother, Jim, a longtime CEO of the grocery chain, were asked at a Thursday news conference why they decided to sell. “Our parents 72 years ago started our company, and since that time the industry has changed,” Jim Ukrop said. Many large-scale competitors have entered the field, he noted, adding that Giant-Carlisle will take what is best about Ukrop’s “and provide it with the necessary resources to compete and to grow.”
Ukrop’s held the largest grocery market share in the Richmond area for decades until this year when Food Lion edged it out for the No. 1 spot.
As part of the sales agreement, Giant-Carlisle will hire the current full- and part-time Ukrop’s employees at the 25 stores and will purchase store assets such as inventory, equipment and existing lease agreements.
“This acquisition is an exceptional fit for two companies that share common values including a commitment to our associates, customers and communities,” Herring said in a press release. “It is our goal to build on the heritage of a great company and ensure the least amount of disruption to customers as part of the sale process. Customers should expect to find the same friendly store teams, excellent customer service and quality foods that they have always found at their local Ukrop’s.”
The first Ukrop’s opened in Richmond in 1937. The company’s stores are closed on Sundays and do not sell alcohol. Asked about changing these policies, Herring said. “As we learn more over time, we will be introducing elements that have made Giant and Martin’s convenient places to shop.”
Two Richmond-based firms, middle-market investment banker Harris Williams & Co. and law firm McGuireWoods, advised Ukrop’s on the acquisition.