Yucaipa Cos.

Investment Firm

1986

While Yucaipa Cos. was formed in the mid-1980s, its roots stretch back a decade earlier, when Ronald Burkle began his career as a boxboy at a Stater Brothers grocery store. His father at the time was the regional chain’s president. By 1981, Burkle, then 28, had risen through the ranks to become vice president of administration for Petrolane Properties, the owner of Stater Brothers.

While Burkle’s rise may have been rapid by conventional standards, the billionaire-in-the-making was just getting started.

When Petrolane decided to sell Stater Brothers in 1981, Burkle persuaded his father and other Stater Brothers officials to make a run for it. Their bid, deemed too low, was rejected, and Burkle was fired from the company that same day.

Burkle employed the capital they had raised for the Stater Brothers bid to buy a local candy store and car dealership. Then in 1986, Burkle and his father with a small group of investors made another run at Stater Brothers, but failed after a bitter proxy battle.

Again, the capital was redeployed, this time to form Yucaipa Cos., named after the Inland Empire town where Burkle had grown up. The fledgling investment firm’s first purchase was Los Angeles-based Jurgensen’s, a gourmet grocer, in 1986.

From there, Burkle went on a tear using junk-bond financing, underwritten mostly by Drexel Burnham Lambert Inc. to acquire a slew of mid-sized grocery chains. By 1989, Yucapia was operating two dozen stores under the name Food 4 Less.

Then it launched into the big time, acquiring major chains nationwide.

The flurry of deals culminated last year with Yucaipa selling Fred Meyer Inc., a Portland, Ore.-based grocery giant, to Cincinnati-based Kroger Co. the nation’s largest supermarket chain for $13 billion.

The wheeling and dealing has made Burkle one of L.A.’s richest people, with an estimated net worth of $1.8 billion.

Yucaipa and Burkle lately have been accelerating their diversification into other industries. In May, the company teamed up with Michael Ovitz to launch an e-commerce entertainment Web site, called CheckOut.com. That was soon followed by CheckOut.com’s purchase of a controlling stake of Scour.Net, an Internet search engine.

Howard Fine