Boulder, Colo.-based natural foods grocer Sunflower Farmers Market will merge with Phoenix, Ariz.-based independent natural foods chain Sprouts Farmers Market and operate under the Sprouts name, the two companies announced Friday. The transaction is expected to close in the second quarter of 2012.

The combined company will operate nearly 150 stores and will have approximately 10,000 employees. It will continue to be majority-owned and controlled by Apollo, a publicly traded closed-end management investment company based in New York.

"We feel incredibly fortunate to be able to bring together the management and operations of these two growth-oriented grocery retailers who focus on natural and organic products," said Andrew Jhawar, a senior Partner at Apollo and co-head of Apollo's Consumer and Retail Industry Group, in a release. "In doing so we will become an even better company offering more value to the nearly 1.5 million customers who regularly shop at the combined company’s stores."

Natural products industry veteran Bill Crawford, director of retail programs for New Hope Natural Media, said there have been rumors of the merger for several weeks and that the announcement will have a significant impact on the retail landscape in several communities.

"Both Sprouts and Sunflower are great chains with great stores," he said. "I have good friends that work for both companies and have been able to see some of the innovation and hard work that has led to their respective growth over the past years.  I look forward to seeing how they integrate their operations and to their growth from here."

With the addition of Sunflower's 35 stores, Sprouts will expand its geographic region to include Nevada, Utah, New Mexico and Oklahoma. It will also add stores in California, Arizona, Colorado and Texas. The combined company is anticipated to open 13 additional stores in 2012.

All Sunflower stores are scheduled to be re-branded under the Sprouts name by the end of the year.

"The combined company will be a prominent player in the Western United States retail food industry, with projected annual revenues approaching $2 billion," the release states.