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Yucaipa Companies

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The Yucaipa Companies
Company typePrivate
IndustryPrivate equity
Founded1986; 38 years ago (1986)
FounderRonald Burkle
HeadquartersLos Angeles, California, United States
ProductsLeveraged buyout
Websiteyucaipaco.com

The Yucaipa Companies, LLC is an American private equity firm founded in 1986 by Ronald Burkle.[1] It specializes in a private equity and venture capital, with a focus on middle-market companies, growth capital, industry consolidation, leveraged buyouts and turnaround investments. It generally invests $25–$300 million in companies with $300–$500 million in revenues.[2]

Yucaipa has a history of leveraged buyouts in supermarket and grocery chains, beginning with Jurgensen's Markets in 1986. After several standalone investments in the late 1980s, it went on to lead the consolidation of West Coast retail that occurred during the 1990s due in part to the rise of discount centers like Wal-Mart.[3][4] In November 2013.

The Yucaipa Companies acquired British retailer Tesco's Fresh & Easy chain five years after it had entered the U.S. market.[5]

History

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1986 - 2000

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In 1987, Food 4 Less grocery franchise of Kansas City was acquired for $35 million. In 1989, Boys Markets was acquired for $375 million. In 1991, Alpha Beta California supermarket chain acquired for $271 million. In 1994, Smitty's Phoenix-based supermarket operator was acquired for $138 million. In 1994, Ralphs Grocery Co. Southern California supermarket chain was acquired for $1.5 billion;[6] Alpha Beta and Boys outlets subsequently were then rebranded as Ralphs[4] In 1997, Ralphs/Food 4 Less merged with Fred Meyer. The following year Fred Meyer sold to Kroger for $8 billion. In 1995, Dominick's, a Chicago-based grocery store chain, was acquired for $750 million. In 1998, Dominick's sold for $1.85 billion to Safeway. In 1999, Yucaipa invested $3 million into GameSpy, and $25 million into Cyrk, Inc.

2000 - present

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In 2004, TDS Logistics was purchased by Yucaipa.[7] Later that year, Yucaipa along with Piccadily Restaurant Investment Group, LLC formed a special purpose entity by Ramy El-Batrawi to acquire Piccadilly Restaurants. In 2005, Yucaipa became the majority shareholder in Aloha Airlines through a $100 million bid to purchase the airline[8] In 2005, the company acquired a 40% stake in Pathmark for $150 million.[9] In 2007, it acquired stake in The Great Atlantic & Pacific Tea Company as part of GA&P's acquisition of Pathmark.[10] In 2008, it acquired stake in Barnes & Noble.[11] In 2009, Yucaipa doubles its stake in Barnes & Noble to 16.8% during e-reader war with Amazon.com, citing corporate governance concerns.[12] In 2012, divested Barnes & Noble shares to Yucaipa investors.[11] In 2011, increases stake in The Great Atlantic & Pacific Tea Company as part of a restructuring following its bankruptcy.[13] In 2012, the company acquired a stake in Barneys New York.[14] In 2014, it acquired Fresh & Easy from Tesco.[15] In 2020, the company made a "major" investment in APA, and American talent agency.[16]

Aloha Airlines purchase

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In February 2006, Aloha Airlines was taken into private ownership by Yucaipa Companies and Aloha Investment Group, LLC head by Ramy El-Batrawi. After 61 years in business, passenger operations shut down on March 31, 2008, due to rising fuel prices, new competition for inter-island travel, a tightening credit market, and dwindling interest by investors in the airline industry. Ramy El-Batrawi died of undisclosed causes on April 23, 2024[17]

In January 2011, Yucaipa won federal Bankruptcy Court approval to buy the Aloha name and other intellectual property for $1.5 million with a stipulation that it not resell the name to Mesa Air Group, the parent of go! Mokulele. It was unknown what the plans were for the Aloha name.[18]

Caught in the pink slime controversy and with interim chief executive Ron Allen citing "ongoing media attention" that has "dramatically reduced the demand for all ground beef products" in 2012, Yucaipa's AFA declared Chapter 11 bankruptcy. Based in King of Prussia, Pennsylvania, AFA at the time the controversy broke had about 850 employees and annual revenues of $958 million.[19][20]

Controversy

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Former U.S. President Bill Clinton, a close friend of founder Ron Burkle, was an advisor to Yucaipa.[21] From 2003 to 2006, Bill and Hillary Clintons' tax returns show total Yucaipa partnership income of $12.5 million. According to the 2007 summary provided by Hillary Clinton's presidential campaign, the Clintons earned $2.75 million from the Yucaipa partnership.[22]

References

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  1. ^ "Yucaipa Cos. History". Funding Universe. Retrieved February 6, 2015.
  2. ^ "Company Overview of The Yucaipa Companies, LLC". Bloomberg Business. Retrieved February 6, 2015.
  3. ^ Phil R. Kaufman (May–August 2000). "Grocery Retailers Demonstrate Urge To Merge". FoodReview. 23 (2): 29–34. doi:10.22004/ag.econ.205543.
  4. ^ a b Roane, Kit R. (September 15, 1994). "California Grocery Deal: Yucaipa to Buy Ralphs". New York Times.
  5. ^ Lawson, Alex. "Tesco completes sale of US arm Fresh & Easy to Yucaipa". Retail Week. Retrieved July 18, 2023.
  6. ^ White, George (April 28, 1995). "Final Hurdle for Ralphs-Yucaipa Merger Cleared : Retailing: Agreement is reached with bondholders who sought higher interest payments from new entity". Los Angeles Times. Retrieved July 19, 2023.
  7. ^ "Our Corporate History". Archived from the original on May 4, 2007. Retrieved August 9, 2023.
  8. ^ "Yucaipa, Equity Firm Buy Aloha Airlines". Los Angeles Business Journal. September 22, 2005. Retrieved July 19, 2023.
  9. ^ "Pathmark-Yucaipa Deal OKd". Los Angeles Times. June 10, 2005. Retrieved September 11, 2013.
  10. ^ Canada, Hillary (September 4, 2012). "Yucaipa Returns to Market With $1.65 Billion Target". Wall Street Journal. Retrieved September 11, 2013.
  11. ^ a b "Burkle's Yucaipa Divests B&N Stake". Wall Street Journal. June 5, 2012. Retrieved September 11, 2013.
  12. ^ Sage, Alexandria (November 13, 2009). "Burkle ups Barnes & Noble stake, cites concerns". Reuters. Retrieved September 11, 2013.
  13. ^ "A&P wins exit financing, files plan". The Deal Pipeline. Retrieved September 11, 2013.
  14. ^ Item Not Found at the Wayback Machine (archived 26 June 2012)
  15. ^ "Tesco offloads loss making Fresh & Easy chain". bbc.co.uk. September 10, 2013. Retrieved September 10, 2013.
  16. ^ Fleming, Mike Jr. (September 4, 2020). "Ron Burkle Makes Big Investment In APA". Deadline. Retrieved September 5, 2023.
  17. ^ News, Hollywood LA (April 24, 2024). "Ramy El-Batrawi Died in L.A." Hollywood LA News. Retrieved April 24, 2024. {{cite web}}: |last= has generic name (help)
  18. ^ "Aloha Airlines name sold". January 5, 2011.
  19. ^ Milford, Phil, and Shruti Date Singh, "AFA Foods Files for Bankruptcy Citing 'Pink Slime' Coverage", April 2, 2012, Bloomberg News. Retrieved 2012-04-02.
  20. ^ Lewis, Al, “Dude, people just don’t want to eat pink slime”, MarketWatch, April 4, 2012. Retrieved 2012-04-04.
  21. ^ John R. Emshwiller (March 16, 2009). "Bill Clinton Leaves Yucaipa Business Partnerships". Wall Street Journal.
  22. ^ McIntire, Mike (April 5, 2008). "Clintons Made $109 Million in Last 8 Years". New York Times.
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