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A Look At Albertsons Pending IPO

Grocery chain Albertsons Companies confirmed filed a registration statement last week to become a publicly listed company, marking its third attempt to do so in the past five years.

Benzinga · 03/10/2020 15:12

Grocery chain Albertsons Companies confirmed filed a registration statement last week to become a publicly listed company, marking its third attempt to do so in the past five years.

What To Know

Albertsons' most recent attempt to become public occurred in 2018 when its merger with pharmacy chain Rite Aid Corporation (NYSE: RAD) was called off. Rite Aid wasn't able to convince its investors the merits of a deal but this time around Albertsons boasts a healthier balance sheet, according to Grocery Dive. The grocery chain has now shown eight straight quarters of identical sales and debt to EBITDA has improved to around three times.

Albertsons' strategy as a public company would consist of leveraging its national scale and attractive store locations to grow through merchandising, technology, and cost-cutting measures, according to Grocery Dive. Management plans on focusing on fresh food, its own branded products, digital initiatives, and store updates.

Albertsons also expects to make use of improved ordering systems and other measures to generate an estimated $1 billion in annual cost savings, according to Grocery Dive.

Why It's Important

The grocery store is also backed by a strong management team, most notably Vivek Sankaran who was the former CEO of PepsiCo Foods North and Chris Rupp who previously served as General Manager, Microsoft, Windows, and Xbox Digital Store Marketing

Albertsons' new IPO attempt comes at a difficult time for the market as investor concern over the coronavirus remains consistent. It remains to be clear if investors will want to invest in the grocery store chain, especially when it will compete against new players like Amazon while discount chains like Aldi continue to focus on expansions.

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