Sunflower Farmers Market, with corporate offices in Boulder and Phoenix, will merge with rival Sprouts Farmers Market of Phoenix, the companies said Friday.

The combined company will operate 139 stores under the Sprouts name and will have about 10,000 employees. The rebranding of Sunflower under the Sprouts name is expected to be completed by the end of the year.

Terms of the deal were not disclosed. Both companies are privately held.

When the merger is completed, Sprouts will be a $2 billion company with headquarters in Phoenix.

In the past year, Sprouts completed a successful merger with Henry’s Farmers Market in Southern California and attracted Apollo Global Management LLC as a major private equity sponsor, said Doug Sanders, the president of Sprouts.

“We’ve been talking to Sunflower for years,” Sanders said. “It just never seemed like the right time.”

But now, with both companies poised for growth over the next few years, the merger makes sense, he said.

Sprouts and Sunflower stores are similar in size and layout, so combining the companies is a logical move, said Bennett Bertoli, vice president of real estate and legal for Sunflower.

“This gives us tremendous power as one company in terms of pricing and buying power, as well as managerial power,” Bertoli said. “It should be a very strong company.”

The move comes just as another competitor is entering the Denver market. Trader Joe’s plans to open a store in Boulder’s Twenty Ninth Street shopping area next year. There is speculation that there will be at least two more Trader’s Joe’s in the greater Denver area.

The combined Sprouts and Sunflower stores will have a competitive advantage against Trader Joe’s, not only because of the buying power, but also because the stores carry fresh products, said Kevin Coupe, a retail analyst with MorningNewsBeat.com.

“Trader Joe’s does not do a great job when it comes to fresh products,” Coupe said. “It does do a great job with packaged products. So many of their packaged goods are products nobody else has.

“People love Trader Joe’s and like what they know about Trader Joe’s even if they’ve never been in Trader Joe’s.”

Founded in 2002, Sprouts opened 23 stores between May 2009 and October 2010 and now has more than 100

locations in Arizona, California, Colorado and Texas. The company employs more than 7,000 people.

The addition of the 35 Sunflower stores will expand Sprouts’ geographic footprint into Nevada, Utah, New Mexico and Oklahoma. It also will expand its presence in its existing markets.

Sprouts, which entered the Colorado market in 2008, has nine stores here, and Sunflower has 12.

The company also plans to open another 13 stores in 2012. It expects to open 15 stores a year for the foreseeable future, Sanders said. Eventually, it will expand to markets outside of the southwestern United States. Sanders said he does not expect Sprouts will close any Sunflower stores.

Co-founded in 2002 by Libby Cook, Mike Gilliland and Randy Clapp, Sunflower was privately owned by the co-founders, management and KMPC Advisors, a provider of private capital expansion.

The company underwent a management shakeup last year after Gilliland, who served as the company’s chief executive, stepped down following charges that he solicited sex with an undercover police officer posing as an underage girl. A trial on those charges is scheduled for next week.

The combined company will continue to be majority owned by Apollo, former owner of Vail Resorts.

Margaret Jackson: 303-954-1473 or mjackson@denverpost.com