BJ's Wholesale Club's IPO Rockets Stock by Nearly 30 Percent
NEW YORK, NY - The public sure seems to have missed BJ’s Wholesale Club—the retailer knocked its initial public offering (IPO) out of the ballpark, after being a private company for the last seven years and, just now, returning to the public markets. On Thursday’s close, shares for the wholesaler were up over 29 percent of the company’s IPO price.
On Thursday, stock for what was simply dubbed “BJ” for its ticker symbol on Wall Street closed at $22 per share, which is $5 above the IPO price of $17 per share. Ultimately, BJ’s Wholesale Club ended Thursday with a bang, as market capitalization reached around $2.78 billion, according to Wall Street Journal. This is a far cry from what BJ’s originally thought its market capitalization would be, which was $2.15 billion, as we previously reported.
The wholesaler offered 37.5 million shares in the offering, first expecting that its IPO would be somewhere between $15 and $17 per share.
Interestingly, the company had underestimated how well Thursday would go. It said it was expecting net proceeds to be in the range of $563 million, if shares landed around $16. Now, with plans to pay down debt—as of May 5th, $2.7 billion in fair value of total debt—the company CVC Capital Partners and Leonard Green & Partners, which took the retailer private in 2011, will keep a stake of about 69 percent once the deal is completed.
The Westborough, Massachusetts-based company employs around 26,500 and has about $12.75 billion in annual sales, with $50.3 million in profits in its most recent year’s results.
What’s next for the retailer? Well, CEO Chris Baldwin said that three to five club houses will be added to the family of locations per year. With these expansions, the company plans to further move into delivery services, as can be seen in its partnership with Instacart, CBS News reported.
“The retail industry continues to innovate as it reacts to what consumers want,” Baldwin expressed.
Will BJ’s successful step back into the public market boost its sales and give it a leg up on competition moving forward? If so, how will that take shape? AndNowUKnow will keep you updated.