Yucaipa Companies

The Yucaipa Companies

Type	Private
Industry	Private equity
Founded	1986
Founder	Ronald Burkle
Headquarters	Los Angeles, California, United States
Products	Leveraged buyout
Website	yucaipaco.com

The Yucaipa Companies, LLC is an American private equity firm founded in 1986 by Ronald Burkle.^[1] It specializes in 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 October 2014, The Yucaipa Companies acquired British retailer Tesco's Fresh & Easy chain five years after it had entered the U.S. market.

History

Yucaipa Boeing 757-200 bizjet

• 1987: Food 4 Less grocery franchise of Kansas City acquired for $35 million
• 1989: Boys Markets acquired for $375 million
• 1991: Alpha Beta California supermarket chain acquired for $271 million
• 1994: Smitty's Phoenix-based supermarket operator acquired for $138 million
• 1994: Ralphs Grocery Co. Southern California supermarket chain acquired for $1.5 billion; Alpha Beta and Boys outlets subsequently rebranded as Ralphs^[4]
  • 1997: Ralphs/Food 4 Less merged with Fred Meyer
    • 1998: Fred Meyer sold to Kroger for $8 billion
• 1995: Dominick's, a Chicago-based grocery store chain, acquired for $750 million
  • 1998: Dominick's sold for $1.85 billion to Safeway
• 1999: invests $3 million in GameSpy, and $25 million in Cyrk, Inc.
• 2004: TDS Logistics purchased by Yucaipa (according to TDS Logistics site )
• 2004: Yucaipa along with Piccadily Restaurant Investment Group, LLC a special purpose entity formed by Ramy El-Batrawi acquires Piccadilly Restaurants
• 2005: Yucaipa becomes the majority shareholder in Aloha Airlines in a $100 million bid to purchase the airline.
• 2005: acquires 40% stake in Pathmark for $150 million^[5]
  • 2007: acquires stake in The Great Atlantic & Pacific Tea Company as part of GA&P's acquisition of Pathmark^[6]
• 2008: acquires stake in Barnes & Noble^[7]
  • 2009: Yucaipa doubles its stake in Barnes & Noble to 16.8% during e-reader war with Amazon.com, citing corporate governance concerns^[8]
    • 2012: divests Barnes & Noble shares to Yucaipa investors^[7]
• 2011: increases stake in The Great Atlantic & Pacific Tea Company as part of a restructuring following its bankruptcy^[9]
• 2012: Stake in Barneys New York^[10]
• 2014: Acquired Fresh & Easy from Tesco^[11]

Aloha Airlines purchase

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.

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 is unknown at this time what the future plans are for the Aloha name.

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.^[12][13]

Controversy

Former U.S. President Bill Clinton, a close friend of founder Ron Burkle, was an advisor to Yucaipa.^[14] 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.^[15]

References

1. "Yucaipa Cos. History". Funding Universe. Retrieved 6 February 2015.
2. "Company Overview of The Yucaipa Companies, LLC". Bloomberg Business. Retrieved 6 February 2015.
3. Phil R. Kaufman (May–August 2000). "Structural Change in the U.S. Food Industry" (PDF). FoodReview 23 (2): 29–34.
4. Roane, Kit R. (September 15, 1994). "California Grocery Deal: Yucaipa to Buy Ralphs". New York Times.
5. "Pathmark-Yucaipa Deal OKd". Los Angeles Times. June 10, 2005. Retrieved 2013-09-11.
6. Canada, Hillary (September 4, 2012). "Yucaipa Returns to Market With $1.65 Billion Target". Wall Street Journal. Retrieved 2013-09-11.
7. "Burkle's Yucaipa Divests B&N Stake". Wall Street Journal. June 5, 2012. Retrieved 2013-09-11.
8. Sage, Alexandria (2009-11-13). "Burkle ups Barnes & Noble stake, cites concerns". Reuters. Retrieved 2013-09-11.
9. "A&P wins exit financing, files plan". The Deal Pipeline. Retrieved 2013-09-11.
11. "Tesco offloads loss making Fresh & Easy chain". bbc.co.uk. 2013-09-10. Retrieved 2013-09-10.
12. Milford, Phil, and Shruti Date Singh, "AFA Foods Files for Bankruptcy Citing 'Pink Slime' Coverage", April 2, 2012, Bloomberg News. Retrieved 2012-04-02.
13. Lewis, Al, “Dude, people just don’t want to eat pink slime”, MarketWatch, April 4, 2012. Retrieved 2012-04-04.
14. John R. Emshwiller (March 16, 2009). "Bill Clinton Leaves Yucaipa Business Partnerships". Wall Street Journal.
15. McIntire, Mike (April 5, 2008). "Clintons Made $109 Million in Last 8 Years". New York Times.