Dollar General Being Prepped for IPO

Dollar General is being prepared for an IPO by private-equity firm Kohlberg Kravis Roberts.

Author:: Jeanine Poggi
Publish date:: Jul 29, 2009 1:26 PM EDT

NEW YORK (

TheStreet

) -- Discounter

Dollar General

might well be making its way back to the public eye.

Private equity firm Kohlberg Kravis Roberts, which operates

KKR Financial Holdings

(KFN)

, is preparing the company for an initial public offering, according to the

Wall Street Journal

KKR is expected to serve as a lead underwriter on the deal, along with Goldman Sachs and Citigroup, according to the Journal. It would be the first time KKR underwrote one of its IPOs.

KKR, by teaming up with Fidelity Investments, will sell shares to institutions, as well as the public.

Dollar General has more than 8,400 stores in 35 states, and sells discounted housewares. Like other discounters, the company has benefited from consumers trading down on home goods.

In the quarter ended May 1, Dollar General earned $83 million, miles above the $5.9 million it earned a year earlier. The company's sales also jumped 16% to $2.78 billion from $2.4 billion, while same-store sales increased 13%.

The company was purchased by an investment group that included affiliates of KKR and Goldman Sachs, among others, for $6.9 billion in July 2007.

The company directly competes with

Dollar Tree

(DLTR) - Get Report

Family Dollar Stores

(FDO)

and

Fred's

(FRED)

, as well as behemoth

Wal-Mart Stores

(WMT) - Get Report