May 17, 2018 / 2:27 PM / 4 months ago

UPDATE 2-BJ's Wholesale files to return to public market

* Plans to list on NYSE under "BJ" symbol

* BofA, Deutsche, Goldman, J.P. Morgan are underwriters

* Returns to market after being taken private in 2011 (Adds details from IPO filing, comments from experts)

By Sweta Singh and Siddharth Cavale

May 17 (Reuters) - Warehouse club operator BJ's Wholesale Club Holdings Inc has filed with U.S. regulators to return to the public market, undeterred by a downturn in the retail sector.

The company, which was taken private in 2011 for $2.8 billion by private equity firms Leonard Green & Partners LP and CVC Capital Partners Ltd, will list on the New York Stock Exchange under the symbol "BJ", a regulatory filing showed on Thursday.

The filing said the offering size was $100 million, a placeholder number given in first preliminary IPO filings. The final size of the IPO could be different.

The Wall Street Journal reported here in April the company could be valued between $2 billion and $3 billion, with its private-equity backers raising at least $400 million.

The filing did not reveal how many shares the company planned to sell or their expected price.

BJ's IPO will be the second retail listing in 2018 after airport concession operator Hudson Ltd and comes at a time when brick and mortar retailers are struggling as consumers spend more of their dollars online.

Warehouse club operators, however, have largely bucked the downturn as their business models rely more on recurring membership revenues than just top line sales.

"We are in a period now where the consumer economy is looking quite good, investors are a bit more confident with retail now than they have been in the past," Neil Saunders, managing director of GlobalData Retail said.

"I think it's a sensible time to do it."

The U.S. IPO market has also been encouraging so far this year. Total proceeds raised year-to-date are 35.4 percent higher than a year earlier and nearly 17 percent more IPOs have been priced this year, according to Renaissance Capital, a manager of IPO-focused ETFs.

"BJ's is looking to make its debut in a very competitive market, but it's performance keeping in mind its scale, is strong. The company deserves to be valued between $5 billion and $8 billion," said Phil Davis, CEO of PhilStockWorld.com, an investment advisory service.

Davis said BJ's stronghold in Northeast, where bigger rival Walmart Inc's Sam's Club has closed several stores, will help it compete better.

The more than three decades old BJ's owns 215 warehouse clubs, mainly on the U.S. east coast, and also competes with Costco Wholesale Corp.

The company generated net income of $50 million on total sales of $12.8 billion for fiscal 2017.

BofA Merrill Lynch, Deutsche Bank Securities, Goldman Sachs and J.P. Morgan will be underwriting the IPO. (Reporting by Sweta Singh and Sidharth Cavale in Bengaluru; Additional reporting by Diptendu Lahiri and Aishwarya Venugopal; Editing by Arun Koyyur and Saumyadeb Chakrabarty)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below