BJ’s Wholesale Club | $BJ Stock | Company Readies $600 Million IPO

BJ's Wholesale Club Photo


BJ’s Wholesale Club hopes to raise up to $600M when it goes public in the week of June 25 this year.

The Westborough, Massachusetts-based warehouse membership club announced the terms for its initial public on Monday, June 18.

The retailer said it will offer a total of 37.5M shares at price of between $15 and $17 per share. –CNBC

BJ’s Wholesale operates a network of membership warehouse clubs on the East Coast of the United States. It is making a return to Wall Street after being taken private by a Beacon Holding Inc subsidiary in 2011 for $2.8 billion.

Currently, it has a total of 134 gas stations and 215 warehouse clubs spread across 16 states. The company on Monday said it has spent more than $230 million to improve its technology and systems, since going being taken private.

J.P. Morgan, Goldman Sachs, Deutsche Bank Securities, and BofA Merrill Lynch are the underwriters for the offering.

The underwriters have also been granted the option to purchase up to 5.6 million additional shares of the company’s common stock within a period of 30 days.

The retailer would command an enterprise value of $4.3B and a fully diluted market value of $2.1B at the midpoint of the proposed range. It filed to go public with last month, and plans to list under the ticker symbol “BJ” on the New York Stock Exchange (NYSE).

According to its Form S1/A filing with the US Securities and Exchange Commission (SEC) on Monday, the company plans to use proceeds from the offering to repay $623.2 million in debt.

It will also use $10.2 million to settle unpaid and accrued interests on its ABL senior secured asset-based term loan, which currently stands at $1 billion.

The company also plans to borrow an additional $71.3 million to help with the settlement. BJ’s borrowed the loan to finance a $735.5 million dividend payment program, and $72.9 million in retention bonuses and stock options. –Marketwatch

BJ’s Wholesale Club has seen remarkable and increasing comparable club sales in the last three quarters and an adjusted EBITDA growth of 31% in aggregate, as well as net income growth of over 109% over the last two fiscal years.

The company posted $12.9 billion in sales for the fiscal year ended May 5, 2018.

BJ’s offers general merchandise, perishable products, gas and general merchandise and other additional services.

The company is also investing in online delivery and ordering capabilities to expand its footprint and compete better. BJ’s Wholesale Club targets price-sensitive consumers with large household in the U.S, especially with an average yearly income of about $75,000.

It was founded in 1984 and is under the leadership of President and Chief Executive Officer Chris Baldwin. Mr. Baldwin joined the company in 2015 having previously the served as the chief executive of Hess Retail Corporation.

The CEO was also the president of Kraft Foods Group between 2007 to 2010. Shareholders with stake of 5% or greater shareholders in the company include Green Equity Investors and CVC Beacon. –SEC