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BJ's Wholesale Club's IPO Rockets Stock by Nearly 30 Percent

BJ's Wholesale Club's IPO Rockets Stock by Nearly 30 Percent

Friday, June 29th, 2018

BJ’s Wholesale Club sure knows how to please a crowd. After seven years as a private company, the company returned to the public markets in a big way. Just a day after its Thursday reintroduction to the market, shares for the wholesaler were over 29 percent of the company’s initial public offering (IPO) price.

Stock for BJ’s closed at $22 per share on Thursday, $5 above IPO price of $17 per share, according to Wall Street Journal. “BJ,” as it was called for its ticker symbol on Wall Street, ended on a high note for its IPO. Its market capitalization reached around $2.78 billion, the news source conveyed, while the retailer originally estimated it would come in at $2.15 billion, as we previously reported.

For its IPO, the wholesaler offered 37.5 million shares, with the expectation that each share would go between $15 and $17.

After seven years as a private company, BJ's is returning to the public markets in a big way

Before stepping back into the Wall Street ring, BJ’s shared that it had different expectations for how Thursday’s opening would go—thinking its net proceeds would come in around $563 million, if shares were about $16 per share. Now, the company plans to pay down its debt—which, as of May 5th, was a reported $2.7 billion in fair value of total debt. CVC Capital Partners and Leonard Green & Partners will hold a stake of about 69 percent once the deal is completed. CVC Capital and Leonard Green took the retailer private in 2011.

BJ’s, which is based in Westborough, Massachusetts, employs about 26,000 people and brings in about $12.75 billion in sales annually. Its most recent year brought in $50.3 million in profits.

This exciting news is followed by more. Three to five club houses will be added to the BJ’s Wholesale lineup every year, CEO Chris Baldwin expressed, according to CBS News. In addition to more physical locations, BJ’s is looking to dive further into the delivery services realm, which can be seen in its partnership with Instacart.

“The retail industry continues to innovate as it reacts to what consumers want,” Baldwin expressed.

Will BJ’s IPO give it a competitive advantage against other retailers, and, if so, will boosted sales relay into even more expansion in the future? Deli Market News will keep you updated.

BJ's Wholesale Club