Haggen has gone through plenty of turmoil the past few months, but its majority stakeholder has experience assisting struggling firms.
When Comvest Partners purchased a majority stake of Haggen in February 2011, officials said the goal was to maximize Haggen’s potential and strengthen its market share in a competitive grocery industry. It’s something the private investment firm, based in West Palm Beach, Fla., has done with a variety of companies, including airlines and medical firms.
Haggen appears to have become one of Comvest’s more challenging investments.
The Bellingham-based grocer filed for Chapter 11 bankruptcy reorganization on Sept. 8, less than a year after it bought 146 former Albertsons and Safeway stores in five states. With that acquisition, Haggen expanded virtually overnight from 18 stores and 16 pharmacies in the Pacific Northwest to 164 stores and 106 pharmacies across Washington, Oregon, California, Nevada and Arizona - the latter in some especially competitive markets.
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Court documents indicate Haggen will pull back from its expansion plans, closing or selling dozens of store locations. Haggen also has filed a $1 billion lawsuit against Albertsons, alleging that Albertsons sabotaged its entry into several new markets. Albertsons has denied this and is suing Haggen for failing to pay $41.1 million in inventory.
Bankruptcy and the pending litigation is not the way things usually go for Comvest, which has a history of investing in companies and helping them reach a certain level before moving on to another company. Since 2000, the private investment firm has invested $1.9 billion in more than 135 companies, according to its website. It currently has $2.3 billion in assets under management.
Officials at Comvest were not made available to talk about Haggen or Comvest itself, but information about how the company has operated in recent years is available through its website and media reports.
Comvest has seen its share of successes and failures. Perhaps its biggest success is Allegiant Travel Company, which Comvest invested in before Allegiant became a publicly traded company, exiting in May 2010.
In 2005, when Comvest made a $39.5 million investment in Allegiant, the relatively small airline was based solely in Las Vegas and serving 17 cities with flights to Las Vegas.
In 2006, Allegiant raised $90 million in its initial public offering, followed by the establishment of airport bases in Phoenix, Bellingham and Orlando, Fla. The company became a stock market darling, with its shares rising from around $30 in 2007 to $232.87 in August 2015. On Sept. 16, the stock price closed at $218.74.
Another successful venture for Comvest was an urgent care medical company called FastMed. At the time Comvest acquired FastMed in 2010, it had nine facilities in North Carolina. By the time Comvest sold the company to ABRY Partners in May 2015, it had nearly 100 facilities in North Carolina and Arizona, employing more than 1,100 people.
Haggen is not the first company involved with Comvest that ended up filing for bankruptcy, however. For example, Comvest invested in a company called Fischer Imaging, before making an exit in September 2005. According to media reports, the company filed for Chapter 11 bankruptcy in August 2006, with the remaining assets being sold to Byers Peak and the rest being converted to a Chapter 7 filing.
For many of Comvest’s ventures, the companies it invested in are either still in business or were sold to other firms. According to its website, Comvest has at least 14 companies it is still involved with, including other retail companies like Old Time Pottery. It also remains active in several other industries, including healthcare, transportation and financial services.
When it comes to turning around or improving companies, one focus is improving the internal operations of the business, according to its website.
“Our approach is to partner with management teams to drive operational improvements and growth in businesses,” Comvest said under the web page “Our Philosophy.”