Retail

Albertsons Updates Finances in Most Recent IPO Filing

Chris Lange

Published: January 25, 2016 11:15 am

Last Updated: January 13, 2020 2:38 pm

Albertsons Companies has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company expects to price its 65.31 million shares in the range of $23 to $26, with an overallotment option for an additional 9.796 million shares. At the maximum price, the entire offering is valued up to roughly $1.953 billion. The company intends to list its shares on the New York Stock Exchange under the symbol ABS.

The underwriters for the offering are Goldman Sachs, Merrill Lynch, Citigroup, Morgan Stanley, Deutsche Bank, Credit Suisse, Barclays, Lazard, Guggenheim Securities, Jefferies, RBC Capital Markets, Wells Fargo, BMO Capital Markets, SunTrust Robinson Humphrey, Telsey Advisory Group, Academy Securities, Ramirez and Blaylock Beal Van.

This company is one of the largest food and drug retailers in the United States, with both strong local presence and national scale. As of December 5, 2015, it operated 2,267 stores across 35 states and the District of Columbia under 18 well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market and Carrs.

Albertsons operates in 120 Metropolitan Statistical Areas (MSAs) in the United States and is ranked number one or number two by market share in 68% of them. It provides customers with a service-oriented shopping experience, including convenient and value-added services through 1,738 pharmacies and 379 adjacent fuel centers.

During fiscal 2014 and the first, second and third quarters of fiscal 2015, excluding Safeway, identical store sales grew at 6.8%, 5.1%, 5.7% and 4.5%, respectively. At Safeway, prior to its acquisition, the rate of identical store sales growth was 3.0% in fiscal 2014 and accelerated in the first, second and third quarters of fiscal 2015 to 3.8%, 4.9% and 5.6%, respectively.

In the filing, the company described its finances as follows:

For fiscal 2014 on a pro forma basis, we would have generated net sales of $57.5 billion, Adjusted EBITDA of $2.4 billion and free cash flow (which we define as Adjusted EBITDA less capital expenditures) of $1.5 billion. For the 12 months ended December 5, 2015, on a pro forma basis, we would have generated net sales of $58.5 billion, Adjusted EBITDA of $2.7 billion and free cash flow of $1.7 billion. For the first three quarters of fiscal 2015, we generated net sales of $44.9 billion, Adjusted EBITDA of $2.0 billion and free cash flow of $1.3 billion. In addition to realizing increased sales, profitability and free cash flow through the implementation of our operating playbook, we expect synergies from the Safeway acquisition to enhance our profitability and free cash flow over the next few years.

The company intends to use the net proceeds from this offering to repay certain existing debt, to pay fees and expenses related to this offering and for general corporate purposes.