Albertsons Files for IPO

The underwriters for the offering are Goldman Sachs, Merrill Lynch, Citigroup, Lazard and Morgan Stanley.

The company is one of the largest food and drug retailers in the United States, with both strong local presence and national scale. As of June 20, 2015, the company operated 2,205 stores across 33 states under 18 well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market and Carrs.

In the filing, Albertsons noted:

We provide our customers with a service-oriented shopping experience, including convenient and value-added services through 1,698 pharmacies and 378 adjacent fuel centers. We have approximately 265,000 talented and dedicated employees serving on average more than 33 million customers each week.

Albertsons believes that the execution of its operating playbook enables sales growth, profitability and free cash flow across the business. During fiscal 2014, excluding Safeway, identical store sales grew at 7.2%. At Safeway, prior to the acquisition, the rate of identical store sales growth accelerated from 1.4% in fiscal 2013 to 3.0% in fiscal 2014, and Albertsons believes that implementation of the playbook will enable an accelerated rate.

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The company is currently executing on an annual synergy plan of roughly $800 million related to the acquisition of Safeway, which it expects to achieve by the end of fiscal 2018. Albertsons expects to deliver annual run-rate synergies of approximately $440 million by the end of fiscal 2015.

For fiscal 2014, on a pro forma basis, Albertsons would have generated net sales of $57.5 billion and free cash flow of $1.5 billion. In addition to realizing increased sales, profitability and free cash flow through the implementation of its operating playbook, the company expects synergies from the Safeway acquisition to enhance its profitability and free cash flow over the next few years.

The proceeds from this offering are intended to be put toward repaying certain existing debt, paying fees and expenses related to this offering, and for general corporate purposes.

FULL FILING