WSJ: Albertsons weighing IPO
Albertsons once again is reportedly readying for an initial public offering. The Wall Street Journal, citing sources close to the discussions, reported that the Boise, Idaho-based retailer is set to decide in the coming weeks on whether to go public with an IPO that might value the company at roughly $19 billion.
The WSJ report also noted that the company has filed documents confidentially with the Securities and Exchange Commission, and have been updating the filings. Additionally, it said an IPO would offer a way out for longtime private-equity backer Cerberus Capital Management. However, it also noted that internal discussions have wondered whether an IPO is best timed now or in the future when the company has been further strengthened.
The IPO talk comes as the company has put effort into strengthening its omnichannel reach, including its Drive Up and Go grocery pickup, prescription delivery in one to two hours and growing e-commerce offerings.
Albertsons’ private label products also have played a role in its growth. In Q3 of fiscal 2019, the company reported that penetration of its Own Brands grew to 25.6%. The retailer’s private label offerings include the O Organics brand, which hit $1 billion in sales and joined other billion-dollar brands Lucerne, Signature Select and Signature Café. Its private label roster also includes Plated, which formerly was a subscription-based meal kit service but has been incorporated as a private label culinary brand since it was acquired in 2017.
Albertsons is no stranger to IPO preparations. In 2015, the company considered going public following its merger with Safeway, projecting them to raise more than $1.8 billion dollars, but the IPO never took place. The company also proposed going public in 2018 when it proposed an acquisition of Rite Aid that ultimately was terminated after Rite Aid’s shareholders soured on the price being offered by Albertsons.
Since 2015, when the company had a debt load of $12.1 billion, the company has paid down a good portion, with it reporting this month with its third-quarter earnings that the debt load was now $8.7 billion as of Nov. 30, 2019.
In the company’s last full-year earnings report, it saw total revenue of $60.5 billion for the year ended Feb. 23, 2019. Albertsons’ current fiscal year-to-date earnings total $47 billion, tracking ahead of the $46.5 billion it had garnered at the same time in fiscal 2018.
To read the full Wall Street Journal report, click here.