Brave or foolhardy? US Foods shrugs off market turmoil to file for IPO
US Foods, the US' second-largest food distributor, has just filed for a $100m (£69.1m) initial public offering (IPO) – despite two days of turbulent global trading.
In a filing with the US Securities and Exchange Commission (SEC) today, US Foods said it will float on the New York Stock Exchange under the ticker symbol "USFD".
The company said its private equity shareholders – Clayton, Dubilier & Rice and Kohlberg Kravis Roberts & Co – will continue to own a majority shareholding after the IPO.
The move follows a failed attempt by Sysco Corporation to buy US Foods last year, after US regulators quashed the deal on competition concerns.
In its filing today, the company said the 18-month period between agreeing a deal with Sysco had been "challenging".
"Sales growth slowed as many potential new customers were hesitant to switch their business to us during this period of uncertainty. During this time, we remained focused on our strategy by bringing innovative products to market, expanding our portfolio of business solutions for our customers and driving advancements in technology," it said.
"As it became apparent that obtaining regulatory approval would be more challenging than expected, we began to see a recovery of sales momentum, particularly with our independent restaurant customers. Following the termination of the acquisition agreement, this momentum has continued to build."
Some may point out that now isn't a classic time to float – although following a day of turmoil on global markets, US stocks only closed slightly down, with the NYSE Composite Index falling just 0.47 per cent.