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Albertsons says it will move ahead with IPO, sets price

Albertsons says it is finally ready. The company will launch its initial public offering, bringing the company back to Wall Street for the first time in nearly fifteen years.

The Boise-based company said it would sell 65.8 million shares of stock, with a price target of between $18 and $20. The company first publicly indicated it would launch the IPO in March, just a few weeks before the COVID-19 pandemic began impacting the US.

Apollo’s investment and the IPO

Last week, Albertsons closed on a large investment from Apollo Global Management. The hedge fund purchased 17.5% of the company’s shares for $1.75 billion – valuing the company at $10 billion.

During the Idaho Tech Council’s Capital Connect event last week, hosted by BoiseDev, Albertsons’ former SVP and current board consultant Andy Scoggin explained why the retailer made the deal with Apollo.

“Apollo is one of the top investment groups in the world,” Scoggin said. “They’ve been very active in the retail grocery space. To the market, it sends a very strong message of confidence. They’ve decided to write a big check to invest in this grocer. It provides a very strong benchmark of value of $10 billion. If you have someone who knows this space and bargains hard (making an investment), they put a price out there.”

Albertsons IPO details

The IPO could raise as much as $1.5 billion. A date for the IPO is still not yet set – though Albertsons filed an updated prospectus with the SEC today that outlines the pricing terms of the offering.

The company will trade on the New York Stock Exchange under the symbol ACI – for Albertsons Companies Inc.

[Q&A with Albertsons: Worker safety, hiring furloughed workers, COVID precautions and more]

Albertsons first launched in Idaho in 1939. Safeway, which it acquired, also started in Idaho, first opened in 1915 in American Falls.

Albertsons maintains its primary headquarters in Boise, and employs hundreds of workers in finance, administration, marketing and other roles. It employs more than 2,500 Idahoans.

The company saw booming results in the wake of the pandemic, with revenue increasing, and the hiring of 55,000 additional employees nationwide.

[In ecommerce battle, Albertsons looks to small neighborhood warehouses; amps up ‘drive up’ service in Boise area]

The long road to Albertsons’ IPO

A coalition of owners led by Cerberus Capital Management currently controls Albertsons. The private equity firm and its allies purchased a small number of Albertsons stores in 2006. It set up Boise-based Albertsons, LLC – separate from Supervalu, Inc., which purchased the majority of the company’s stores.

Where Supervalu struggled, Albertsons, LLC surged. Seven years later, in 2013, Supervalu sold all its stores to the Cerberus-led group. It later acquired Safeway Inc. andtransitioned its back-end systemsto that company’s infrastructure to lessen its dependence on Supervalu.

In 2015, Albertsons said it would go public, but dropped the idea late that year after other grocery companies saw weakness on Wall St.

It latertried to acquire Rite Aid, taking the combined company public. But that deal also fell apart.

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Don Day - BoiseDev Editor & Founder
Don is the founder and publisher of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow. Contact him at don@boisedev.com.

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