A Closer Look At Albertsons Ahead Of The Grocer's IPO

Grocery chain Albertsons plans on selling 65.8 million shares on the New York Stock Exchange and its stock could start trading as early as this week.

Here's what investors need to know about the S-1 filing.

Albertsons Pricing, Valuation Details: Albertsons will trade on the NYSE under the ticker "ACI" with a target price between $18 and $20 per share.

The grocer secured a $1.75 billion investment from private equity giant Apollo Global in late May. The deal values the company at around $10 billion.

Albertsons is looking to raise as much as $1.5 billion as part of its return to the public market. The company was taken private in 2006 after being bought by Cerberus Capital Management and others.

The entire proceeds from the IPO will be paid to insiders. Albertsons will not receive any of the proceeds from the sale of the shares.

About Albertsons: Albertsons is one of the largest food retailers in the U.S., with 2,252 stores across 34 states and the District of Columbia. The company oversees multiple brands, including the core Albertsons, Safeway, Vons and Pavilions. 

The business also includes 1,290 in-store coffee shops, 402 adjacent fuel centers, 23 distribution centers, 20 manufacturing facilities and multiple online platforms.

Albertsons estimates it holds a No. 1 or No. 2 market share in 68% of the 121 metropolitan areas in which it has a presence. 

Financials: Net income rose from $46 million in fiscal 2017 to $131 million in 2018 and $466 million in 2019. Net sales for 2019 were $62.5 billion, and cumulative adjusted free cash flow was $6.7 billion.

Albertsons has shown nine consecutive quarters of positive identical sales growth, the most recent of which was 1.8% growth in the fourth quarter of 2019. Same-store sales accelerated due to the COVID-19 pandemic: they were up 47% in the four-week period ending March 28, up 21% in the four-week period ending April 25 and 21% in the four-week period ending May 23.

Net debt at the end of 2019 was $6.7 billion.

"The momentum we are experiencing gives us confidence that our Easy, Exciting and Friendly identity resonates with customers," according to the company. "We believe our strategic framework will enable us to continue delivering profitable growth going forward."

Albertsons Dividend Policy: Albertsons will pay a quarterly dividend on its common stock equal to 2.5% of the initial public offering price, assuming $19 per share. The first dividend will be issued during the first full quarter following the completion of the offering.

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Photo by Famartin via Wikimedia.