Albertsons Companies has announced plans to go public. The fourth-largest grocer in the U.S, serving over 33 million customers, is to make 65.8 million shares of Class A common stock available as part of the Initial Public Offering.
Albertsons Companies IPO
The IPO is priced at between $18 and $20. Once complete, the grocer will trade in the New York Stock Exchange under the ticker symbol ACI. Over 20 banks are underwriting the IPO led by Bank of America Securities, Citigroup, and Goldman Sachs.
The company is going public at a time when debt in its books of accounts has soared significantly. The company had about $8.2 billion in outstanding debt as of February 29, compounded by $667 million in finance lease obligations. Its interest costs shrunk to $698 million in fiscal 2019 from $830.8 million in 2018.
Albertsons Companies is also going public at the peak of the CIVID-19 pandemic after opening its first store in Boise, Idaho, in 1939. The company has evolved to become one of the biggest grocery stores in the U.S with 2.2252 stores and operations in 32 states. Its portfolio of grocers includes Vons, Safeway, Jewel, and Acme.
The grocer is going public two years after a proposed merger with Rite Aid Corporation (NYSE: RAD) fell through. The company had initially pulled off plans to go public in favor of the $24 billion mergers. However, the deal fell through after pressure from stakeholders.
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Amazon Competition
A year earlier, the company had suffered a major setback after Amazon.com, Inc. (NASDAQ: AMZN) acquired Whole Foods Market in a $13.7 billion deal. There were talks that the grocer was planning to acquire Whole Foods to strengthen its prospects in the segment.
Albertson is going public at a time when brick and mortar retail outlets are facing significant challenges amidst the COVID-19 pandemic. Consumer shopping patterns have changed significantly, with most of them opting to do shopping on e-commerce platforms and have items delivered at their doorstep.
Amazon has emerged as a go-to store for all items online. The e-commerce giant should continue to pile pressure on Albertsons Companies in the grocery business, given that it has Whole Foods within its ranks.
