Stout Advises United Grocery Outlet on Its Sale to Grocery Outlet

Stout has advised Gen Cap America, Inc. on the sale of its portfolio company, Bargain Barn, Inc. d.b.a. United Grocery Outlet (UGO), a Tennessee-based, extreme value, discount grocery retailer, to Grocery Outlet Holding Corp. (NASDAQ:GO) (Grocery Outlet). Stout served as the exclusive financial advisor to Gen Cap and UGO in connection with the transaction.

UGO was founded 50 years ago, and today operates 40 stores located across Tennessee, North Carolina, Georgia, Alabama, Kentucky, and Virginia, offering customers tremendous savings within a treasure hunt shopping environment. UGO maintains strong relationships with national and regional brands, which enables it to provide quality food at extreme values.

Based in Emeryville, California, Grocery Outlet is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products sold through a network of independently operated stores. Grocery Outlet has more than 460 stores in California, Washington, Oregon, Pennsylvania, Idaho, Nevada, Maryland, New Jersey, and Ohio.

Gen Cap is a Nashville-based private equity firm that provides equity for management buyouts, division spinoffs, and recapitalizations of profitable, well-established lower middle-market businesses.

Lisa Bryson, Chief Executive Officer of UGO, said, “We are thrilled to become part of Grocery Outlet and to have found a partner who shares our mission and business strategy. Together, we look forward to growing the positive impact on our community.”

“UGO is a natural fit given our similar opportunistic buying strategies, customer value propositions, and shared mission of serving our communities,” stated RJ Sheedy, President and Chief Executive Officer of Grocery Outlet. “This acquisition provides Grocery Outlet with scale in a new region as well as a platform for future expansion in the Southeast. We are excited to welcome the UGO team into the Grocery Outlet family, and we look forward to working together on the many growth opportunities ahead.”

Stout’s Conrad Hahne, Gregory Klen, Michael Gerszonovicz, and Colin Corrigan executed the transaction.

Bass, Berry & Sims PLC acted as legal advisor to Gen Cap and UGO. BofA Securities acted as exclusive financial advisor, and Honigman LLP and Gould & Ratner LLP acted as legal advisors to Grocery Outlet.

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