NEW YORK (TheStreet) -- Shares of Sprouts Farmers Market Inc (SFM) are slipping, down 5.02% to $29.89 in morning trading Tuesday, after the grocery store chain announced the launch of a public offering of 15 million shares of its common stock held by affiliates of Apollo Global Management, LLC.
UBS Securities LLC, the sole underwriter for the offering, will have the option to purchase up to an additional 2.25 million shares of common stock from the selling stockholders.
The Phoenix, AZ-headquartered company said it will not issue shares in the offering and will not receive any proceeds from the sale of the shares by Apollo in this offering.
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Sprouts Farmers Market is a healthy grocery store offering products such as fresh produce, bulk foods, vitamins and supplements, and packaged groceries catering to consumers' with growing interest in health and wellness, operating more than 190 stores in 10 states.
Separately, TheStreet Ratings team rates SPROUTS FARMERS MARKET as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SPROUTS FARMERS MARKET (SFM) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, premium valuation and poor profit margins."