US Foods Plans to Raise About $1 Billion in IPO
May 13 2016 - 11:42AM
Dow Jones News
By Joshua Jamerson
US Foods Holding Corp. said it expects to raise about $1 billion
in an initial public offering of stock, and that the company would
use the proceeds to pay back some of its debt.
US Foods put a price range of $21 to $24 a share on its IPO, the
company said in a regulatory filing Friday, nearly a year after
larger rival Sysco Corp. abandoned a tie-up following a federal
ruling against the planned marriage.
The company could raise up to $1.23 billion from the offering if
the stock prices at the high end of its estimated range and its
so-called overallotment is fully sold.
The company said that at the midpoint of the range, $22.50, it
estimates net proceeds of up to $1.1 billion after certain
deductions, such as estimated offering expenses, and if the
overallotment is sold.
US Foods plans to sell 44.4 million shares of its common stock,
plus up to 6.7 million shares in a so-called overallotment option,
which gives underwriters the opportunity to sell additional shares
under certain circumstances.
US Foods said it would use the proceeds from the offering to
repay $932 million in debt, and use any remaining proceeds for
general corporate purposes.
Sysco last June abandoned its planned acquisition of US Foods,
following a federal judge's ruling against the deal. Sysco, the
nation's largest purveyor of food and other supplies to restaurants
and cafeterias, had been working on the merger for more than a
year.
A deal would have added about $20 billion in annual revenue from
US Foods to Sysco's $46.5 billion in annual sales, creating a
combined company with about 25% of the national market. Sysco was
required to pay US Foods a $300 million breakup fee.
The company said it is applying to have its stock listed on the
New York Stock Exchange under the symbol USFD.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 13, 2016 11:27 ET (15:27 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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