All Eyes on Albertsons’ Upcoming IPO
America’s Second-Largest Grocer Aims for a Public Debut
The grocery chain Albertsons is planning an IPO. Shares of the company are likely to begin trading publicly by the end of this week.
Albertsons is the second-largest grocery store chain in the US after Kroger (KR). In addition to operating its namesake stores, the Idaho-based company also owns Jewel Osco, Safeway, and Vons, as well as the meal-kit maker, Plated.
Albertsons aims to sell shares for between $18 and $20. This would give the company a valuation of over $10 billion. The company will trade on the New York Stock Exchange under the ticker ACI. Because the stock sale comes from existing shareholders, it will not yield proceeds for Albertsons. For example, it will give one of its backers, Cerberus Capital Management LP, a chance to cash out on its approximately 15-year investment.
Past Attempts to IPO
In 2015, Albertsons also made an attempt to go public but did not go through with it because other retail stocks were performing poorly at the time, and investors were wary of Albertsons’ heavy debt load. The company also looked to IPO in 2018 when it attempted to acquire the drugstore, Rite Aid, but shareholders were not on board.
Times have changed for the company. Since the end of fiscal 2017, Albertsons has reduced its net debt by $3 billion. Additionally, like other grocers around the country, Albertsons saw a boom in sales during the pandemic as people stocked up on supplies and ate meals at home. Same-store sales for the company were up 47% in March and 21% in April.
Investors Are Eating Up New IPOs
The IPO market is roaring back after stagnating during the start of the pandemic. After a period of almost no IPOs, several companies have had successful debuts recently including Warner Music Group (WMG), ZoomInfo Technologies (ZI), and Vroom (VRM).
Investors also have their eyes on other companies getting ready to IPO. For example, two weeks ago, the insurance start-up Lemonade announced it confidentially filed to go public. Airbnb said it may go public this year as well, despite suffering losses due to the pandemic. Albertsons’ public debut will be one of this year’s biggest IPOs yet, and investors will be watching it closely.
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