Dive Brief:
- After acquiring rival Safeway, Albertsons Cos., the second-biggest U.S. grocery-store chain, filed for an IPO. The company said it plans to raise up to $100 million, but that amount is likely just a placeholder that will later increase.
- Albertsons did not reveal the stock exchange it will list its shares on or a requested ticker symbol.
- Citigroup, Morgan Stanley, Goldman Sachs, and Merrill Lynch, Pierce, Fenner & Smith are underwriters to the IPO, according to a company filing with the U.S. Securities and Exchange Commission.
Dive Insight:
"The company reports a $385 million net loss on nearly $58 billion in revenue for pro forma 2014 (i.e., with Safeway included), and more than $12 billion in debt on the books," according to Fortune.
Albertsons will use proceeds from the IPO to pay down what it owes, and the retailer said it would also use the money for general corporate purchases, The Wall Street Journal reported. Albertsons also said in its filing that it will open new stores and potentially acquire more companies to expand its store base.
Earlier this year, Safeway was rumored to be seeking an IPO, its third.
Albertsons' IPO announcement also follows a recent move by Ahold to acquire Delhaize, which would create the sixth-largest U.S. food retailer. While Safeway and Albertsons stores do have a presence on the East Coast, most of their stores are concentrated in the western half of the U.S., particularly along the West Coast. Conversely, about two-thirds of Ahold and Delhaize's sales come from the East Coast.