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Leonard Green, CVC to sell off BJ’s stake
Posted on Monday, 11 February 2019 14:47
Two private equity backers of BJ’s Wholesale Club Holdings are seeking to exit their investment by way of a second offering potentially worth up to USD 1.56 billion.
Leonard Green & Partners and CVC Capital took the membership-only discount warehouse private in 2011 for USD 2.80 billion and subsequently returned it to the stock market in June 2018 via a USD 600.00 million-plus float.
The two - as well as several other existing investors - have now filed a prospectus to offer and sell up to an aggregate of 58.35 million shares from time to time.
Leonard Green and CVC are each aiming to offload 28.50 million stocks, which represent a 20.8 per cent stake, or an aggregate 57.00 million scrips totalling 41.6 per cent.
Massachusetts-based BJ’s is a leading operator on the east coast of the US with its 216 large-format, high volume membership clubs spanning 16 states.
BJ’s offers 25.0 per cent or more savings on a representative ‘basket’ of manufacturer-branded groceries when matched up to traditional supermarket competitors.
The company claims to be positioned between other warehouse clubs and foodstuff retailers as it combines bulk purchasing with smaller pack sizes in perishables.
In the 39 weeks ended 3rd November 2018, it booked net sales of USD 9.38 billion, up from USD 9.01 billion over the same period 28th October 2017.
A net loss of USD 16.41 million turned to a profit of USD 62.95 million over the same timeframe.
The deal, based on the estimated current value, would be the second largest secondary offering on record targeting the US wholesale and retail trade industry, according to Zephyr, the M&A database published by Bureau van Dijk.
A previous sell-down by Leonard Green and CVC in September 2018 represented the sector’s biggest of 2018.
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