Dollar General Corporation (NYSE: DG) is holding a public secondary offering of 25 million shares which are being sold by private equity backers who still own a large part of the company.  The king of dollar stores has now had several offerings since it came public again and the stock has risen handily since its IPO.

None of the shares in this offering are being sold by the company, so none of the proceeds will be for the benefit of the company.  The underwriters have been granted an option to purchase up to 3.75 million additional shares.

Citigroup, Goldman Sachs, KKR, J.P. Morgan, and Barclays are listed as the joint book running managers; co-managers are listed as BofA Merrill Lynch, Wells Fargo, Sanford Bernstein, CICC, and Macquarie Capital.

Selling shareholders include Goldman Sachs Group, Inc. (NYSE: GS) and affiliates of KKR & Co. L.P. (NYSE: KKR).

What is interesting is that it appears as though Dollar General is also going to directly repurchase shares from the controlling shareholders.  In case you forgot, the new team managing funds at Berkshire Hathaway Inc. (NYSE: BRK-B) has bought Dollar General shares and is now up substantially.

We started covering Dollar General as a secular bullish buy back when shares were in the $20’s.  Shares are now around $47.00 and the consensus price target from Thomson Reuters is listed as $51.78 and the 52-week trading range is $29.84 to $47.59.

JON C. OGG

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