Albertsons Cos. has filed for a public stock offering, providing at long last a potential exit from the private owners who have held the company for 14 years.
The Boise, Idaho-based supermarket retailer, which has grown from a collection of unwanted stores spun off in the breakup of its predecessor to a $60 billion, 2,220-store company through a series of acquisitions, has made several attempts at getting back onto the public markets in recent years. That includes an attempted IPO that was scuttled amid industry weakness in the wake of the Amazon-Whole Foods deal in 2017, and a failed reverse merger with the publicly traded drugstore retailer Rite Aid in 2018.
Officials from Albertsons had recently said that debt reductions—and new business momentum—were providing the company with “flexibility” to pursue new financing capabilities, including an IPO. The company has been controlled by a consortium led by the private equity firm Cerberus Capital Management, along with real estate investors Kimco Realty, Klaff Realty and Schottenstein Stores.
The filing also comes a day after the company agreed to settle a contract dispute with workers at its Safeway stores in the Mid-Atlantic states. At issue in that negotiation was an underfunded pension liability that some reports indicated was a final barrier to a public offering. A spokesperson declined to comment to WGB on the details of the settlement.
The Cerberus-led group controlling Albertsons formed when it agreed to buy 877 stores that were left out of the 2006 Albertsons Inc.-Supervalu sale, only to reunite the old Albertsons and American Stores banners that Supervalu purchased when that group ran into financial trouble in 2013. In 2015, the renewed Albertsons acquired its one-time rival Safeway.
Those deals loaded the company with debt that it was able to reduce in recent years in part through a series of sale-leaseback deals.
In a letter to investors published as part of its S-1 filing, Albertson CEO Vivek Sankaran said, “The banners that make up Albertsons have earned customer loyalty over decades. Yet, in many ways, our company is only a few years old. Since the Safeway merger in 2015, we have successfully completed the integration of our stores, supply chain and technology platforms. We have invested in capabilities allowing us to serve the customer wherever, whenever and however they choose to shop. We now benefit from one of the industry’s largest networks of First-and-Main, food retail locations with leading market shares in valuable and growing markets. It allows us to serve our customers locally, while delivering the advantages of national scale.
“All of these elements have come together in a corporate identity that is customer focused to make the shopping experience easy, exciting and friendly,” Sankaran’s message continued. “We have developed a robust strategic framework to support this identity, resting on the four pillars of growth, productivity, technology, and talent and culture. These pillars equip us to win in our sector. I believe we can deliver attractive and improving financial performance, grow market share and increase customer lifetime value through more engaged relationships across our omnichannel platform and loyalty ecosystem.”