99 Cents Only Stores Inc. said Tuesday it had agreed to a $1.6 billion buyout from Los Angeles private equity firm Ares Management and the Canada Pension Plan Investment Board.

The chain, founded in 1982, operates 289 stores in California, Texas, Arizona and Nevada, and was a pioneer of the single-price retail concept. Such low-priced stores have become increasingly popular with consumers in the years since the economy began to falter.

The family of company founder David Gold will continue to hold a significant minority stake. In addition, Chief Executive Eric Schiffer, company president Jeff Gold, and executive vice president Howard Gold will all remain in their positions and serve as directors, with David Gold serving as chairman emeritus.

In a company statement, Mr. Schiffer said the buyout agreement “delivers significant value to our shareholders… We have come to know and respect Ares Management and CPPIB through this process and we believe they will be excellent partners and help us achieve our long-term goals as a company.”

Ares Management also has invested in such businesses as Samsonite, Serta and Simmons Bedding. The Canada Pension Plan Investment Board invests the retirement assets of some 17 million Canadians.

On Tuesday morning, shares of 99 Cents Only Stores Inc. were trading at $21.39, up 4.4 percent from Monday’s close.

[The Los Angeles Times]