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IPO in the works at Albertsons

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BOISE, Idaho — Albertsons Cos., the nation’s second-largest supermarket company and one of the biggest retail pharmacy operators, plans to go public.

The company filed a registration statement last month with the Securities and Exchange Commission for an initial public offering of common stock. The number of shares to be offered, their price range and the date of the offering haven’t yet been determined. Albertsons said it intends to use the net proceeds of the offering to repay debt and for general corporate purposes.

Owned by an investor group led by New York-based Cerberus Capital Management, Albertsons operates 2,205 supermarkets, 1,698 pharmacies and 378 fuel centers in 33 states and the District of Columbia under 18 banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market and Carrs. In the IPO filing, the company said that, on a pro forma basis, it would have generated net sales of $57.5 billion in fiscal 2014.

Capitalizing on the demand for health and wellness services is a key part of the company’s strategy, according to Albertsons’ registration statement.

“Pharmacy customers are among our most loyal, and their average weekly spend is over 2.5 times that of our nonpharmacy customers,” the company stated.

“We plan to continue to grow our pharmacy script counts through new patient prescription transfer programs and initiatives such as clinic, hospital and preferred network partnerships, which we believe will expand our access to patients. We believe that these efforts will drive sales growth and generate customer loyalty.”

Albertsons completed its acquisition of Safeway Inc. at the end of January, and the company said it expects to realize annual run-rate synergies of about $440 million by the end of fiscal 2015, and annual synergies of $800 million by the end of fiscal 2018.

The company also detailed in its filing its expectations for increased same-store sales growth. Legacy Albertsons Stores have delivered positive identical-store sales growth in each of the past 16 fiscal quarters, the company said, and in fiscal 2014, it delivered identical-store sales growth of 8.2% across the Albertsons stores it acquired from Supervalu Inc., which it said had posted negative same-store sales growth rates of 4.8% in fiscal 2012 (prior to their acquisition).


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