Bodega Latina Corporation’s Acquisition of Smart & Final Holdings

Bufete Robles Miaja, S.C. and Sidley Austin LLP represented GCC and BLC, while Morgan, Lewis & Bockius LLP represented Smart & Final and Apollo. Skadden, Arps, Slate, Meagher & Flom LLP and Galicia Abogados, S.C. advised the Joint Lead Arrangers and Joint Bookrunners for the acquisition financing.

Grupo Comercial Chedraui, S.A.B. de C.V. announced that its subsidiary, Bodega Latina Corporation, has entered into a definitive agreement to acquire Smart & Final Holdings, Inc. from funds managed by affiliates of Apollo Global Management, Inc. for approximately U.S.$620 million, including the assumption of certain indebtedness.

The acquisition represents a U.S. GAAP FY2020 EBITDA multiple of 3.7x. GCC will finance the acquisition at the BLC level, with the support of GCC and certain material subsidiaries of GCC, with U.S.$620 million via a fully committed financing arranged by Joint Lead Arrangers and Joint Bookrunners BBVA Bancomer, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, BofA Securities Inc. and Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat. The remaining portion of the purchase price of Smart & Final will be financed through the assumption of certain indebtedness and the use of cash on hand or existing facilities. Concurrent with the transaction, BLC will be refinancing its existing debt. At the close of the acquisition, GCC’s consolidated pro forma net debt to EBITDA ratio is expected to be 1.1x. The GCC board of directors approved this transaction.

Chedraui is a publicly owned company with variable capital created under the name Grupo Comercial Chedraui, S.A.B. de C.V., that operates hypermarkets and supermarkets in Mexico and the United States.

Headquartered in Paramount, California, Bodega Latina Corporation entered the grocery retail marketplace with its first store in South Gate, California in June of 1997. In 2018, BLC completed the acquisition of Fiesta Mart, a Texas-based food retailer with an emphasis on the Hispanic Segment.

In business since 1871, Smart & Final is the smaller, faster grocery warehouse store, headquartered near Los Angeles in Commerce, Calif.. Smart & Final’s 254 store locations offer quality products in a variety of sizes, saving customers time and money without a membership fee. Its larger format stores, Smart & Final Extra!, combine the warehouse store with traditional grocery offerings like farm-fresh produce and natural and organic options, to provide a one-stop shop for all.

Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo, among others. Apollo had assets under management of approximately $461 billion as of March 31, 2021 in credit, private equity and real assets funds.

RBC Capital Markets, LLC acted as the exclusive financial advisor to GCC and BLC. Credit Suisse and Deutsche Bank acted as financial advisors to Smart & Final and Apollo.

The Skadden team advising the Joint Lead Arrangers and Joint Bookrunners was led by Capital Markets partner Alejandro Gonzalez Lazzeri (Picture), associate Nicolas Perez Sierra and law clerk Diego Diaz Asmat.

In Mexico, Galicia Abogados, advised the Joint Lead Arrangers with Guillermo Pérez Santiago, Cecilia Rojas, Jorge Javier Mendizábal Hori and Claudio Díaz M.

The Sidley M&A team was led by Katy Lukaszewski and Mark Metts, and the financing team was led by Kelly Dybala and Karen Goldstein. The Sidley team also included Alex Tanton, Blake Longoria, and Haley Cambra (M&A); Zack Pullin (Tax); Karen Kazmerzak (Antitrust); Ben Rosemergy, P.C. Wang, and Susan Delgado (Employee Benefits); Terri Reuter, Galit Knotz, and Abigail Hudson (Labor and Employment); Heather Palmer, Allen Braddock, and Amy Lally (Environmental); Lauren Grau and Summer Danzeisen (Technology and IP Transactions); Mark Prior and Ash Nagdev (Privacy and Cybersecurity); Scott Goldstein (Insurance); Swathi Shankar (Global Finance); and Marketa Lindt and Teodora Zlatkova (Immigration).

In Mexico, Bufete Robles Miaja advised Grupo Comercial Chedraui, S.A.B. de C.V. (GCC) and Bodega Latina Corporation with Rafael Robles Miaja,  María Luisa Petricioli Castellón, Gustavo Rodríguez Aradillas, Jorge Jiménez Morales and Juan Pablo Campos González.

Creel, García-Cuéllar, Aiza y Enríquez advised Apollo Global Management, Inc. and Smart & Final Holdings, Inc. with Mauricio Serralde,  Aleine S. Obregón Natera and Regina Esparza.

Morgan, Lewis & Bockius advised Apollo Global Management, Inc. and Smart & Final Holdings, Inc. in US.

Involved fees earner: Aleine Obregón Natera – Creel, García-Cuéllar, Aiza y Enriquez SC; Mauricio Serralde – Creel, García-Cuéllar, Aiza y Enriquez SC; Jorge Javier Mendizábal Hori – Galicia Abogados, S.C; Guillermo Pérez Santiago – Galicia Abogados, S.C; Cecilia Rojas Mata – Galicia Abogados, S.C; María Luisa Petricioli Castellón – Robles Miaja Abogados; Rafael Robles Miaja – Robles Miaja Abogados; Gustavo Rodríguez Aradillas – Robles Miaja Abogados; Allen Braddock – Sidley Austin LLP; Haley Cambra – Sidley Austin LLP; Kelly Dybala – Sidley Austin LLP; Karen Goldstein – Sidley Austin LLP; Scott Goldstein – Sidley Austin LLP; Lauren Grau – Sidley Austin LLP; Abigail Hudson – Sidley Austin LLP; Karen Kazmerzak – Sidley Austin LLP; Galit Knotz – Sidley Austin LLP; Amy Lally – Sidley Austin LLP; Marketa Lindt – Sidley Austin LLP; Blake Longoria – Sidley Austin LLP; Katy Lukaszewski – Sidley Austin LLP; Mark Metts – Sidley Austin LLP; Ash Nagdev – Sidley Austin LLP; Heather Palmer – Sidley Austin LLP; Mark Prior – Sidley Austin LLP; Zackary Pullin – Sidley Austin LLP; Teresa Reuter – Sidley Austin LLP; Benjamin Rosemergy – Sidley Austin LLP; Swathi Shankar – Sidley Austin LLP; Alexander Tanton – Sidley Austin LLP; P.C. Wang – Sidley Austin LLP; Teodora Zlatkova – Sidley Austin LLP; Alejandro Gonzalez Lazzeri – Skadden Arps Slate Meager & Flom; Nicolas Perez Sierra – Skadden Arps Slate Meager & Flom;

Law Firms: Creel, García-Cuéllar, Aiza y Enriquez SC; Galicia Abogados, S.C; Robles Miaja Abogados; Sidley Austin LLP; Skadden Arps Slate Meager & Flom;

Clients: Apollo Global Management; Bank of America Securities; BBVA Bancomer; Bodega Latina Corporation; Scotiabank Mexico (Scotiabank Inverlat S.A.); Smart & Final ;

Author: Martina Bellini