Albertsons Looks To File IPO: What Does It Mean For The Grocery Chain?

Grocery chain Albertsons is once again looking to file for an IPO with a reported valuation of $19 billion.

According to the sources for the Wall Street Journal, Cerberus Capital Management, the private equity firm behind Albertsons initiated the talks and is working with the grocer to make a decision within “weeks.”

Based on Albertsons strong performance over the last few quarters and increasing sales forecast combined with a strong stock market, Cerberus is reportedly pushing for the company to go private. However, executives at both Cerberus and Albertsons are at odds over whether the grocer should file or wait for a better evaluation, the Journal said.

Since last November, the company has reduced its debt load from $10.52 billion to $8.34 billion and has a 3.0x net debt to EBITDA ratio, which according to Albertsons CEO Vivek Sankaran, puts it “in the right zone” for an IPO.

Albertsons first filed for an IPO in 2015 after it purchased more than 1,300 Safeway stores, pulling the filing amid a weak market. It made another attempt in 2018 after a possible merger with RiteAid that eventually fell through.

Now, Albertsons seem poised to go public, showing eight straight quarters of comp store increases, Grocery Dive reported. The company has also increased its store remodel pace, invested its private brands, and enhanced its customer loyalty program, the news outlet said.