Americold Initial Public Offering Raises Ton of COLD Cash
Atlanta, Georgia-headquartered Americold, the world’s largest owner and operator of temperature-controlled warehouses, on January 23 announced the closing of its initial public offering (IPO) of 52,095,000 common shares of stock at a price of $16.00 per share. This included the underwriters’ full exercise of an option to purchase 6,795,000 common shares consisting of 4,350,000 common shares from Americold and 2,445,000 common shares from the selling shareholders at the initial public offering price, less the underwriting discount.
Americold issued and sold 33,350,000 common shares and the selling shareholders sold 18,745,000 common shares. The stock began trading on the New York Stock Exchange under the ticker symbol “COLD” on January 19, and was priced at $17.60 shortly before noontime on January 24, when this story was filed.
The company, which formally conducts business as Americold Realty Trust, will grant underwriters a 30-day option to purchase up to an additional 3,600,000 common shares.
Americold owns and operates more than 160 refrigerated warehouses offering approximately 945 million cubic feet of storage space and 2.3 million pallet places in the United States, Canada, Australia, New Zealand and Argentina. Its facilities, which also include joint venture coldstores in China, are an integral component of the supply chain connecting food producers, processors, distributors and retailers to consumers. The company serves over 2,600 customers and employs approximately 11,000 associates worldwide.
“Shares outstanding following the IPO are now valued at $2.36 billion at $17.77 per share,” calculated The Value Investor in a January 22 post at the Seeking Alpha website, a crowd-sourced content service for financial markets. “Americold operated with $1.82 billion in net debt ahead of the IPO, and this will be reduced to $1.46 billion following the IPO, valuing the entire business at $3.82 billion.”
Its analysis continued: “The company generated revenues of $1.49 billion in 2016, as sales were flattish compared to 2014 and 2015. Some real growth was seen in the first nine months of 2017 in which sales were up more than 7%, placing the company on track to generate $1.6 billion in sales this year. 2016's operating earnings number of $117 million could see a small boost as well towards roughly $125 million.”
Last September Ron Burkle is said to have turned down a $3 billion-plus binding offer for his Americold refrigerated warehouse business from Stephen Schwarzman’s Blackstone Group. Apparently it was then that Burkle’s Yucaipa Companies investment firm opted to go the IPO route.
“The Los Angeles billionaire now plans to cash out of the growing business by taking it public, two sources close to the situation said,” Josh Kosman reported in the New York Post on September 27. “A spokesman for Yucaipa declined comment on Blackstone, but emphasized that the strategic review continues and that Americold could either be sold or be the subject of an IPO.”
Well, now you know which road was taken.