The Fresh Market’s bonds plunge as Cerberus and other PE firms are circling.
The Fresh Market had made its name once upon a time by focusing on higher-margin groceries, such as imported cheeses and organic produce and wooing customers with on-site butchers. In March 2016, it was acquired by private-equity firm Apollo Global Management. As private company, it no longer has to report earnings publicly. But now its bonds are crashing.
Monday last week, it disclosed to some investors that same-stores sales had plunged 8.2% in the quarter, and that Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was a lower-than-hoped for $29.3 million, according to Debtwire. This set off the bond plunge for the week.
There was more, according to Debtwire:
The market was also taken aback by the company’s disclosure that it recently obtained a $50 million unsecured revolver from its parent [Apollo], raising questions as to why it needs the extra liquidity. As of 30 July, TFM had $32.9 million of cash and $74.6 million of borrowing availability under its existing $100 million revolver.
This post was published at Wolf Street on Oct 3, 2017.