This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Sprouts IPO Raises $333M, Shares Pop

NEW YORK (The Deal) -- Private equity-backed Sprouts Farmers Market (SFM) on Thursday priced its 18.5 million-share initial public offering at $18 a share, above the expected $14 to $16 range, raising $333 million.

The stock continued to ascend during the day, closing at $40.11, up 14.6% from the opening trade and 122.8% above the initial pricing.

Phoenix-based Sprouts is a specialty retailer of natural and organic foods, operating 163 stores in eight states. Of the 19 openings planned for 2013, 15 have been completed, and about 20 are planned for 2014, the company said in its prospectus.

For the 13 weeks ended March 31, net income was $ 18.1 million, on net sales of almost $400 million, up from net income of $9.5 million for the same period the year before, on $375.7 million in sales.

Sprouts' private equity backers, Apollo Global Management (APO) and San Diego-based Silver Canyon Group, did not sell their stakes in the IPO.

With the dilutive effects of the offering, Apollo's stake went from 51.8% to 45.4%, while Silver Canyon's stake, which it holds via its KMCP Grocery Investors LLC vehicle, went from 7% to 6.2%.

At the IPO price, Apollo's stake of about 65.2 million shares is worth about $1.17 billion. That, added to the $262.2 million dividend the private equity company took out in April, means Apollo thus far has made an unrealized return of about 6.8 times its original $210 million equity investment in February 2011.

Silver Canyon's stake of 8.8 million shares in Sprouts is worth $159.1 million at the IPO price.

That, added to the $55 million Sprouts paid to acquire Sunflower and the $19.7 million April dividend, brings the firm's unrealized gain to about 7.8 times the $30 million investment the firm made when it acquired Sunflower in December 2007.

Sprouts itself sold about 17.7 million shares in its IPO, while shareholders unloaded nearly 800,000 shares.

Credit Suisse, Goldman Sachs, (GS) and Bank of America Merrill Lynch (BAC) acted as joint bookrunners on the deal.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs