EL SEGUNDO, Calif. — Private investment firm Yucaipa Cos., which was founded by billionaire Ron Burkle, plans to acquire Fresh & Easy Neighborhood Market from U.K.-based Tesco PLC.
Yucaipa's purchase is slated to be complete within three months. In the meantime, it is expected to be business as usual for most Fresh & Easy stores.
Tesco stated that Yucaipa will acquire more than 150 stores as well as Fresh & Easy’s Riverside distribution and production facilities. More than 4,000 employees will transfer to the new business. As part of the deal, Tesco will loan the new business 80 million pounds, secured against the Riverside Campus facility.
Those stores not included in the transaction will be closed over the coming weeks. The total cash outflow relating to the closure of these stores, other expenses and the loan is expected to be no more than 150 million pounds.
“The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy’s stakeholders. It offers us an orderly and efficient exit from the U.S. market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy,” stated Philip Clarke, CEO of Tesco.
“Fresh & Easy is a tremendous foundation. Tesco should be applauded for giving their customers an affordable, healthy, convenient shopping experience,” added Burkle. “Its dedicated employees and great base of customers give us a solid starting point to complete Tesco's vision with some changes that we think will make it even more relevant to today's consumer. We plan on continuing to build Fresh & Easy into a ‘next-generation convenience retail experience,’ providing busy consumers with more local and healthy access for their daily needs."
Fresh & Easy opened its first stores in November 2007 and has 200 neighborhood markets in California, Nevada and Arizona. The company employs more than 5,000 people, including 1,300 at its distribution and manufacturing facilities in Riverside.