On July 8, Albertsons Companies filed a registration statement with the Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO) of shares of its common stock.
At this point in time, the company stated the number of shares to be offered and the price range have not yet been determined.
The Boise, ID-based retailer, which operates 2,382 stores, created a new Delaware corporation that was formed for the sole the purpose of changing the organizational structure of former parent AB Acquisition LLC and its direct and indirect consolidated subsidiaries into a corporation rather than a limited liability company. Private equity firm, Cerberus Capital Management remains the primary owner of Albertsons.
In its regulatory filing with the SEC, the company said it plans to raise up to $100 million in its IPO effort. That preliminary amount, used to calculate registration fees, is likely to change.
Once the offering closes, Albertsons said each entity within AB Acquisition will contribute all equity interests to Albertsons companies and become a wholly owned subsidiary of it.
It said Goldman Sachs, Bank of America Merrill Lynch, Citigroup and Morgan Stanley are acting as joint book-running managers and Lazard is acting as a co-manager and IPO adviser for the proposed offering.
In addition to its nearly 2,400 supermarkets Albertsons also owns 390 adjacent fuel centers, 30 distribution centers and 21 manufacturing facilities.
In fiscal 2014, Albertsons posted a loss of $1.2 billion on $27.2 billion in sales. On a pro-forma basis – which includes the Safeway acquisition (completed in January 2015) and removes other merger-related charges – the company said it would have lost $385 million on $57.5 billion in sales, making it the second largest pure-play supermarket chain I the country behind Kroger. Sales at locations open at least a year rose an adjusted 4.6 percent in 2014.
The filing also noted that Albertsons expects the Safeway acquisition to create annual run-rate synergies of approximately $440 million by the end of fiscal 2015, which it said should increase to approximately $800 million by the end of fiscal 2018.
Albertsons said it intends to use the proceeds to pay down debt and for general corporate purposes. In the filing, the chain also said it plans to grow its store base by opening new stores and through potential acquisitions.
Of interest, too, was a memo Shane Sampson, Albertsons’ executive VP and chief marketing and merchandising officer, sent to many of the company’s vendors, which stated: “It’s an exciting and important step forward for us; that said, it doesn’t change our focus at all. Our priorities are exactly the same today as they were yesterday: running fresh, full, friendly and clean stores, and, of course, driving sales.
“In our registration, we officially used the name ‘Albertsons Companies, Inc.,’ which is the name that the stock will eventually trade under when the IPO process is complete. We chose the word ‘Companies’ because it was important for us to select a name that showcases that we operate under many banners, each with its own strong history and each important to our total success. Regardless of the corporate title we use, the most important names in our company will always be those on the fronts of our stores. This doesn’t change the way our divisions or corporate teams work with you. We’re still as focused as ever on being the ‘Favorite Local Supermarket’ of all of our customers across the country.”