US Foods’ IPO way create a corporate ad account
Steve’s breakdown: Seems this IPO is going very well but they will now have to keep it up everyday. The way many BtoB companies do that is through Corporate Advertising. That’s your in!
ROSEMONT, IL: Shares of US Foods surged more than 7 percent this morning on their first day of trading on the New York Stock Exchange.
After pricing shares at $23, near the high end of its range of $21 to $24, the Rosemont-based food distributor raised $1 billion by selling 44.4 million shares in its initial public offering. At midday, the stock was trading at $24.70.
The IPO, the second-largest issued in the U.S. this year, would enable US Foods to pay down a portion of its roughly $5 billion in debt. It also opens a path for its private-equity owners, Clayton, Dubilier & Rice and KKR, to begin converting some of their shares to cash after their attempted $3.5 billion sale to larger rival Sysco fell apart last year on anti-competitive concerns.
US Foods, which reported about $23 billion in revenue for fiscal 2016, was valued at about $5.1 billion in the IPO, including debt. It is trading under the symbol USFD.
Going public was one of the few options left for what was Illinois’ fourth-largest privately held company, which the two private-equity firms bought from Dutch conglomerate Royal Ahold in 2007 in a deal valued at $7.1 billion.
They sought to cash out of their holdings in late 2013 with a proposed $3.5 billion sale to Sysco. An outright sale would have given the owners a quick and tidy exit, not to mention a windfall that could be put to work on new investments.
But the Federal Trade Commission sued to block the merger on concerns it would hurt customers. The deal officially collapsed in June 2015 after a federal judge ruled the combination would be harmful to competition.
Finally in February the company announced its intentions to issue an IPO, a plan that included a round of job cuts and a special one-time dividend in which KKR and CD&R extracted $666.3 million from the company’s coffers.
A company spokeswoman did not respond to a request for comment.