Sprouts Farmers Market and Henry's Farmers Market -- two natural foods grocery chains that were founded by the same family, but operated under different owners -- will merge operations, officials announced Wednesday.

Financial terms for the arrangement were not disclosed. As a result of the combination, Sprouts will have 7,000 employees and 98 stores located in Arizona, California, Colorado and Texas through the addition of Henry's, a California-focused chain that also operates Sun Harvest stores in Texas.

Sprouts has a location in Boulder at 2950 Baseline Road.

The acquisition is expected to close in the second quarter, officials said.

Private equity firm Apollo Management LP will serve as the majority owner of the combined company, which will operate under the Sprouts Farmers Market name. Apollo Management is the principal equity owner of Smart & Final Stores LLC, the Los Angeles-based grocery chain that acquired 35 Henry's Farmers Markets and Sun Harvest stores in 2007 from Whole Foods Market.

The Austin, Texas-based Whole Foods gained ownership of the farmers market-style stores through its 2007 buyout of Boulder's Wild Oats Markets, which acquired Henry's Farmers Market in 1999.

While Apollo Management will serve as the majority owner of Sprouts, members of the Boney family -- whose members founded Henry's and Sprouts -- will manage the combined company's operations, officials said.

"The deal is going to bring an infusion of capital and talent into Sprouts," said Joe Dobrow, a Sprouts spokesman. "We're doubling the size of the company, essentially, overnight. With that comes resources, deeper pockets and a lot of very talented people from the Henry's side."

The infusion of capital also will help Sprouts become more aggressive in expanding its store base, Dobrow added. Officials for Sprouts say they intend to open as many as 10 new stores this year.

Coincidentally, the natural grocers' merger comes in the same month of two high-profile bankruptcy filings -- that of Colorado-based Ultimate Electronics and the Ann Arbor, Mich.-based Borders Group Inc.

"Don't think that we haven't already been scrutinizing the store lists and store locations for both (companies)," Dobrow said. "... The implosion of the commercial real estate market that led, in part, to the bankruptcies of Circuit City, Linens 'N Things and Mervyns has been a boon for Sprouts."

The merger also comes less than a week after the co-founder and CEO of Boulder-based Sunflower Farmers Market -- a natural grocery chain with stores in Arizona, Colorado, Colorado, Nevada, Utah, New Mexico and Texas -- resigned from his position after being arrested on suspicion of soliciting sex with a minor.

Sunflower's markets do overlap geographically with Sprouts' stores, but the grocers' customer bases are different, Dobrow said, adding Sprouts typically gains new customers of "traditional" stores such as King Soopers.

"I don't know what will happen with Sunflower, but I really don't think it's an important competitive implication for us," he said.

In a statement e-mailed to the Camera, the newly appointed CEO of Sunflower said he welcomed the merger.

"This merger indicates the growing acceptance and strength of specialty markets devoted to organic and natural foods," CEO Chris Sherrell said in the statement. "As the value leader in this market, we welcome this merger. Healthy competition is good for everyone, most of all for our customers."

Contact Camera Business Writer Alicia Wallace at 303-473-1332 or wallacea@dailycamera.com.