Supermarket deal to be complete by year end

Tops sold to management team

November 15, 2013 Updated Nov 15, 2013 at 2:06 PM EDT

By James Fink, Business First of Buffalo

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Tops sold to management team

November 15, 2013 Updated Nov 15, 2013 at 2:06 PM EDT

In a deal that has been in the works for more than one year, the upper echelon of Tops Markets LLC local corporate structure is in the process of completing a management buyout of the supermarket chain from its New York City-based investors.

The Tops team, led by Frank Curci, the chain's current president and CEO, has agreed to purchased the company from an investment group headed by Morgan Stanley Private Equity. The deal, which should be completed by year end, will shift all of Tops' decision making and corporate structure to its Amherst headquarters. It will also, almost instantly, make Tops one of the region's top, privately-held companies dwarfed only by Rich Products Corp. and Delaware North Cos.

Aside from who ultimately owns the 159-store chain, there will be little noticeable difference under the new ownership.

"It's business as usual for Tops," said Katie McKenna, Tops public relations manager. "The Tops Management team will stay focused on achieving our vision for Tops. We will keep the well-being of our customers, communities and employees foremost in our mind. We very much believe that this WNY-based management structure is a very positive development for Tops and the communities we serve."

Financial terms have not been disclosed.

Morgan Stanley acquired Tops from Royal Ahold in late 2007 for $310 million. At the time, the chain had 71 stores mostly in Western New York's eight counties and a smattering in the Rochester market. Under Curci's leadership, Tops has grown to 159 stores whose footprint has taken its supermarkets acrosse Upstate New York plus portions of northern Pennsylvania and Vermont.

Tops remains one of the largest, independently owned supermarket chains in the Northeast.

McKenna said Morgan Stanley has been strong supporters for Tops' recent growth spurt.

"Morgan Stanley Private Equity has been a very supportive partner to Tops Management for five-plus years," she said. "This time period has been one of strong growth for Tops: we've doubled our number of stores, increased our geographic footprint and added new jobs in the markets we serve. With the support of Morgan Stanley Private Equity, and the talent and expertise of Tops' WNY-based management team, the company has seen tremendous growth over the past six years and is positioned for future success and long-term growth."

Morgan Stanley, according Securities and Exchange Commission documents, had a 66 percent ownership stake in Tops while another New York investment group, Graycliff Partners, commanded 19 percent of its chain's ownership structure. Others, including Curci, had smaller financial stakes in the company.

Tops, in its 28-week sales numbers through the end of July, reported a 6 percent increase in overall year-over-year sales. It reported $1.34 billion in sales for this year's 28-week period compared with $1.27 billion in 2012.

Besides Curci, the other members of the new Tops' executive management team include: Kevin Darrington, chief operating officer; Rick Mills, chief financial officer; John Persons, senior vice president of operations; Jack Barrett, senior vice president of human resources; and Lynne Burgess, senior vice president general counsel and secretary.

The management team is buying the stock of the company and will own all assets and liability, including debt.