Vitamin Shoppe raises better-than-expected $154.6M in IPO; shares soar in 1st day of trading
By APWednesday, October 28, 2009
Vitamin Shoppe IPO raises $154.6M, shares soar
NEW YORK — Vitamin Shoppe Inc. raised $154.6 million in its initial public offering Wednesday, more than had been expected.
Shares of the company soared $1.11, or 6.5 percent, to $18.11 in midday trading. The stock earlier traded as high as $20.29.
The retailer of fish oil, sports nutrition products and vitamins priced 9.1 million shares at $17 each, above the expected range of $14 to $16.
Vitamin Shoppe is the first brick-and-mortar retailer to go public since December 2007. It had initially signaled its intention for an IPO more than two years ago before the recession began and stock markets collapsed.
The offering’s underwriters, JPMorgan, BofA Merrill Lynch and Barclays Capital, have a 30-day option to buy another 1.4 million shares.
The North Bergen, N.J., company said its net proceeds from the offering will be about $121.2 million. Cash for the 1.4 million shares sold by existing shareholders doesn’t benefit the company. Vitamin Shoppe will use the proceeds to redeem about $72.5 million of preferred stock held by its shareholders, mainly private equity firm Irving Capital Place.
Irving Capital Place, formerly known as Bear Stearns Merchant Banking, took Vitamin Shoppe private in late 2002. It will retain a 54.5 percent stake after the offering.
The company doesn’t plan to pay dividends for the forseeable future.
Vitamin Shoppe also will repurchase $45.2 million in debt and pay expenses related to the offering, such as management fees to Irving Capital.
In the year ended December 27, 2008, Vitamin Shoppe booked net income of $8.2 million, up 21 percent from $6.8 million a year earlier. Sales rose to $601.5 million from $537.9 million.
The company has steadily opened stores throughout the recession which hit most retailers hard. At stores open at least a year — a key retail metric — Vitamin Shoppe has grown sales by more than 4 percent every year since 2006.
Vitamin Shoppe is one of three IPOS scheduled for this week. Addus HomeCare Corp., another private equity backed offering, raised $54 million late Tuesday. AEI, which operates power and natural gas infrastructures in developing countries, is expected to debut later this week.
