US Foods Holding Corp. (NYSE: USFD) entered the market with this year’s second largest initial public offering (IPO). The company priced its 44.44 million shares at $23 per share, with an overallotment option for an additional 6.67 million shares. At this price the entire offering is valued up to $1.18 billion.

Goldman Sachs, Morgan Stanley and JPMorgan acted as joint book-running managers for the offering and the representatives of the underwriters. Merrill Lynch, Citigroup, Credit Suisse, Deutsche Bank Securities, Wells Fargo Securities and KKR also served as joint book-running managers, and BMO Capital Markets, Guggenheim Securities, ING, Rabo Securities and Natixis were co-managers for the offering.

US Foods is among America’s largest food companies and one of only two foodservice distributors with a national footprint in the United States. With net sales of $23 billion in the 12 months ended January 2, 2016, it is the second largest foodservice distributor in the country, with a 2015 market share of roughly 9%. The U.S. foodservice distribution industry is large, fragmented and growing, with total industry sales of $268 billion in 2015.

In the IPO filing, the company said:

Our mission is to be First in Food. We strive to inspire and empower chefs and foodservice operators to bring great food experiences to consumers. This mission is supported by our strategy of Great Food. Made Easy. It centers on providing a broad and innovative offering of high-quality products to our customers, as well as a comprehensive suite of industry-leading e-commerce, technology, and business solutions. Our scale gives us the ability to serve customers nationwide with a highly efficient distribution network and centralized business processes. As we say on our trucks, we are Keeping Kitchens Cooking across America.

US Foods supplies over 250,000 customer locations nationwide. These include independently owned single- and multi-unit restaurants, regional restaurant concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations.

The company also provides over 400,000 fresh, frozen and dry food stock-keeping units, as well as non-food items, sourced from over 5,000 suppliers. Its more than 4,000 sales associates manage customer relationships at local, regional and national levels. They are supported by sophisticated marketing and category management capabilities, as well as a sales support team that includes world-class chefs and restaurant operations consultants. The extensive US Foods network of 61 distribution facilities and a fleet of approximately 6,000 trucks provide an efficient operating model, allowing it to offer high levels of customer service.

The net proceeds from this offering are intended to be used to repay indebtedness, as well as for working capital and general corporate purposes.

Shares of US Foods were last seen trading at $24.60. So far the trading range on the day was $24.08 to $25.00, with over 20.7 million shares traded.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.