Showtime At The Apollo

Private equity firm Apollo Management is preparing a bid to acquire 99 Cents Only Stores, a 285-store deep-discount chain with $1.4 billion in revenue, little debt and 5.3% rise in profit in the latest quarter, according to an article in the NY Post. The interested following a trend for private equity companies buying stakes in dollar stores. 99 Cents had a $1.3 billion deal earlier this year with Leonard Green & Partners to go private. Last week, Berkshire Hathaway disclosed it had made a $48 million investment in Dollar General and earlier this year, billionaire Nelson Peltz offered to acquire Family Dollar for $7 billion.

Why all the interest? Double dip recession fears and cheap food are pulling in ever more cost-conscious customers. The average 99 Cents transaction rose to $9.70 with more than 50% of revenue from food and grocery, pulling customers away from low cost chains such as Wal-Mart Stores, Inc.