After a deal with Sysco for the acquisition of the company didn’t come to pass last year, US Food Holdings Corp., the second largest food distribution company in the U.S., has filed with the Securities and Exchange Commission (SEC) for an initial public offering (IPO), reports the Chicago Business Journal.
Bloomberg reports that the company which is backed by Clayton Dubilier & Rice (CD&R) and KKR & Co., is seeking to raise $1 billion through the float, according to sources with close knowledge of the plans, and is tracking ongoing market volatility to gauge the timing of the offering.
The company, which was acquired by KKR and CD&R through a leveraged buyout for $7.1 billion in 2007, currently holds a 9% market share, and posted net sales of $23 billion and a net loss of $73 million for fiscal year 2014, and posted net sales of $17.2 billion and net income of $177 million for the 39 weeks ending September 26, according to its prospectus.
US Foods and Sysco worked to successfully structure a takeover of US Foods for $3.5 billion, however after 18 months the deal was blocked last year by the Federal Trade Commission on anti-trust concerns and fears that the loss of competition would result in increased prices.
In its filing with the SEC, US Foods noted, "This 18-month period was challenging for our business. Sales growth slowed as many potential new customers were hesitant to switch their business to us during this period of uncertainty,” according to the Chicago Business Journal.
Due to market volatility, only two companies have gone public in the U.S. so far this year – Beijing-based biotech company BeiGene Ltd and Bill Gates-backed Editas Medicine Inc., which has since dropped below its IPO price. However, Oaktree Capital-backed AdvancePierre Foods has reportedly reached out to Credit Suisse Group AG and Morgan Stanley to manage its upcoming IPO which could value the company at $2.5 billion, and once equity markets display a level of stabilization, investors could see a wave of companies going public.