MILWAUKEE-Retail experts agree that the sheer success of the grocery store in today’s market is providing Roundy’s, a Midwest chain of 158 stores, with the courage to propose an initial public offering of about $230 million. The locally based company, which has been for sale by private equity firm Willis Stein & Partners since 2007, filed the offering Monday in a preliminary prospectus to the SEC.
The company operates the stores under the Pick ‘n Save, Copps, Rainbow, Metro Market and the new Mariano’s Fresh Market banners in Wisconsin, Minnesota and Illinois, the latter which the firm has made a strong push in the last year. Mariano’s Fresh Market stores, with a small footprint and upscale offerings, are planned for a handful of Chicago-area locations, including in the new mixed-use project proposed along Lawrence Avenue in the Ravenswood neighborhood.
Bill Rose, director of the National Retail Group for Marcus & Millichap, tells GlobeSt.com that he knows the Roundy’s chain, and thinks the timing is perfect for the IPO. “Given the current highly-favored status of grocery-anchored centers, the capital markets will look favorably on this move,” he says. “The Mariano’s stores, for example, are a smaller format, competitive with Whole Foods, and are going in high-profile infill locations.”
Money is right now chasing the top three dominant centers in each market, and Roundy’s has a lot of these, Rose says. Inland Real Estate Corp., in its joint venture with PGGM, announced today that it has purchased two Midwest retail centers for $43 million, including the Metro Market-anchored Brownstones Shopping Center in Brookfield, WI for $24.1 million.
Inland has purchased a number of Roundy’s-anchored centers. "These assets are all firmly in line with the goals of the joint venture, which seeks to acquire grocery-anchored and community retail centers in strong locations within targeted Midwest markets," said Scott Carr, president of property management for Inland Real Estate Corp., in a statement today.
In the preliminary prospectus, Roundy’s said it will use the funds raised to pay down on about $800 million in debt. The private company owner will own a majority of the stock, but the firm will be required to report publicly after the sale. The company has reported nearly $4 billion in sales this year.
A company spokesman tells GlobeSt.com that she can’t comment on the IPO, as the firm is now in a quiet period. The red herring filing, so called because of red wording at the top affirming that no guarantees are being made in the preliminary prospectus, usually has a quiet period of at least 20 days.
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