Albertsons Cos., the second-largest U.S. grocery-store chain
following its $9.4 billion purchase of rival Safeway Inc. earlier
this year, started the process of going public on Wednesday.
The Boise-based grocer, privately owned by an investor group led
by Cerberus Capital Management, said in a regulatory filing that it
plans to raise up to $100 million in an initial public offering.
That figure, used to calculate registration fees, is likely to
change.
In addition to Safeway stores, Albertsons operates grocers under
banners including Jewel-Osco, Acme and Tom Thumb. To win regulatory
approval for its Safeway acquisition, Albertsons agreed to divest
168 stores.
As of June, the store tally was 2,205 locations in 33 states
plus the District of Columbia. Kroger Co. is the only U.S.
grocery-store chain larger than Albertsons.
Last year, Albertsons swung to a loss of $1.2 billion on $27.2
billion in sales. On a pro forma basis—which includes Safeway
performance and strips out certain merger-related charges, among
other things—the company said it would have lost $385 million and
reported $57.5 billion in sales. Sales at locations open at least a
year rose an adjusted 4.6% last year, driven by growth in SVU
Albertsons Stores.
Albertsons said it intends to use the proceeds to pay down debt
and for general corporate purposes. In its filing, the chain also
said it plans to grow its store base by opening new stores and
through potential acquisitions.
The plans to go public come as mainstream grocers are
increasingly pinched from both high-end stores catering to the
growing consumer preference for fresh and natural items, like Whole
Foods Market Inc., and discount options like Wal-Mart Stores Inc.
According to the company, its decentralized operating structure
enables the company to respond to local tastes and preferences.
Albertsons also cited competition from e-commerce, where
companies like FreshDirect operate, and said it has a growing
Internet presence.
The IPO is being led by Goldman Sachs & Co., Bank of America
Merrill Lynch, Citigroup, Morgan Stanley and Lazard.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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