Carteret, N.J., Pathmark Stores Inc. received a $150 million infusion of cash from Yucaipa Cos. LLC, a Los Angeles-based private-equity firm. Yucaipa will buy 20 million newly issued shares of Pathmark, representing about 40% of the grocer’s common stock.
The deal, expected to close this summer, includes a 5-year management agreement under which Yucaipa will provide guidance on marketing, operations, finance and other strategic elements. Following the closure of the deal, Yucaipa will nominate five new directors to add to Pathmark’s current board of six directors.
Pathmark plans to use the funding to upgrade existing stores and open new locations.