Tags: Grocery Chain | Smart and Final | stock | NYSE debut

Grocery Chain Smart & Final's Shares Rise in NYSE Debut

Wednesday, 24 Sep 2014 12:37 PM

Shares of Smart & Final Stores Inc. rose about 11.6 percent in their market debut, valuing the century-old warehouse-style grocery chain at about $1 billion.

The company raised about $161.4 million after its offering was priced at $12 per share, the low end of its expected price range of $12-$14.

Smart and Final, backed by private equity firm Ares Management LP, is selling all the 13.45 million shares in the offering.

The company operates under two store banners, Smart & Final and Cash & Carry, and has 250 stores in the western United States.

Smart & Final's shares opened at $13.10 and touched a high of $13.39, valuing the company at $951.4 million. More than 3 million shares changed hands by 10:34 a.m. ET, making it one of the most heavily traded stocks on the New York Stock Exchange.

Ares Management bought Smart and Final from Apollo Global Management LLC in 2012 for $975 million. Ares invested about $287 million in cash, according to a report from Moody's Investors Service.

Ares' stake will drop to about 74.7 percent from 95.6 percent after the offering if the underwriters exercise their full option to buy additional shares.

Smart & Final, headed by 59-year-old David Hirz, a former executive of Kroger Co, plans to use the proceeds from the offering to repay debt and for general corporate purposes.

The company's long-term debt more than doubled to $703.3 million as on June 15, from $304.1 million in November 2012, just after it was taken over by Ares Management.

Smart and Final also operates 52 Cash & Carry stores spread across Washington, Oregon, Northern California, Idaho and Nevada.

The company, which competes with grocery chain Albertson's LLC, Kroger and Safeway Inc, offers catering services and features appetizers and snack recipes such as grilled steaks and smoky canapés on its website.

Smart and Final had about 8,800 employees as of June and reported a 13 percent rise in net sales to $3.21 billion between 2011 and 2013.

The California-based company listed Credit Suisse, Morgan Stanley and Deutsche Bank Securities among the lead underwriters to the offering.

© 2017 Thomson/Reuters. All rights reserved.

   
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Shares of Smart Final Stores Inc.rose about 11.6 percent in their market debut, valuing the century-old warehouse-style grocery chain at about $1 billion.
Grocery Chain, Smart and Final, stock, NYSE debut
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2014-37-24
Wednesday, 24 Sep 2014 12:37 PM
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