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US Foods Raises $1.02 Billion to Secure Second Biggest IPO of the Year

US Foods Raises $1.02 Billion to Secure Second Biggest IPO of the Year

Thursday, May 26th, 2016

US Foods has finally secured its IPO, and reportedly raised $1.02 billion on Wednesday. This makes US Foods the second-largest IPO in U.S. so far in this year.

US Foods is currently trading under the ticket symbol USFD. In its first day of trading, the Wall Street Journal reported a surge US Foods’s stock up 5.3 percent at $24.25 in the morning trade.

Photo Credit: Market Watch

An anonymous source close to the matter told the Wall Street Journal that US Foods priced its 44.4 million shares at $23 as of market close on Wednesday. This price is within the original speculative range given by the company of $21 to $24. 

Analysts had been closely following US Foods’ move towards its IPO as the company was the first major leverage buyout going public since the stock market initially became wary of debt-laden offerings at the end of the last year, according to Reuters. 

This IPO securement, stated Reuters, is also a way for the company’s private equity owners Clayton, Dublier & Rice LLC and KKR & Co LP, to sell their own shares in the company. Last year, the U.S. Federal Trade Commission stopped a prospective sale of the company to Sysco Corp. 

For the fiscal year of 2016, US Foods reported an EBITDA of $875 million, and $23 billion in revenue. Although the company has about $5 billion in debt, US Foods plans to pay down on that amount with proceeds from its IPO. Some of the underwriters for the offering include Goldman Sachs & Co., Morgan Stanley, and J.P. Morgan. 

US Foods is the third private equity-backed IPO to have raised more than $1 billion since the start of 2015, and was only beat out by MGM Growth Properties LLC’s IPO of $1.2 billion last month for the highest spot. 

DeliMarket News will continue to have the ticket as we keep an eye on the company and how its public stature will affect the market.

US Foods