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HolidayBuyer's Guide
Tech Industry

Online grocer hits $100 million home run

Hannaford Brothers, a Scarborough, Maine-based grocer, sells a majority interest in its online home delivery service, HomeRuns.com, to private equity firm the Cypress Group for $100 million.

Hannaford Brothers, a Scarborough, Maine-based grocer, has sold a majority interest in its online home delivery service, HomeRuns.com, to private equity firm the Cypress Group for $100 million.

In addition, Hannaford announced today that Robert J. Tarr, Jr., former chief executive of retailer Neiman Marcus Group, will take over as chief executive of HomeRuns.com sometime next month.

Online grocer HomeRuns, which services the Boston area, intends to use the $100 million investment to help fuel expansion into 20 cities nationwide, and challenge larger online grocers such as Webvan and Peapod, according to the company.

The online grocery and home-delivery markets have been heating up in recent months. Benchmark Capital-backed Webvan plans to go from serving solely the San Francisco Bay area to offering its products in 26 new markets, including Atlanta and Seattle, in the next two years.

Meanwhile, HomeGrocer, which is backed by Amazon.com and operates primarily on the West coast, plans to open operations in eight to 10 new markets around the nation by the end of this year.

Hannaford will retain a minority interest in HomeRuns.com, according to a company statement.

The Cypress Group manages two private equity funds and has invested more than $3.5 billion in such companies as Cinemark USA, Amtrol Holdings and Danka Business Systems.