IPO lifts AdvancePierre Food shares 15%

by Josh Sosland
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CINCINNATI – Shares of AdvancePierre Food Holdings, Inc., a producer and distributor of sandwiches, sandwich components and other products, traded higher July 15 following the company’s pricing a day earlier of its initial public offering of common stock. Early July 15, the shares traded up to $24.24, a 15 percent premium to the offering price.

Included in the offering, expected to be completed July 20, are 18,600,000 shares of common stock, priced at $21 per share, sizing the offering at $390 million. The offering includes 11,090,000 shares sold by the company and 7,510,000 shares sold by existing shareholders. The latter group has granted underwriters a 30-day option to purchase 2,790,000 additional shares of stock. AdvancePierre shares will trade on the New York Stock Exchange under the symbol APFH. Proceeds from the offering will be used to repay debt.

Following the IPO, funds managed by Oaktree Capital Management, LP, will continue to own a majority of the AdvancePierre common stock. Of 78,586,202 shares to be outstanding after the offering, 60 percent will be owned by Oaktree funds (57 percent if underwriters exercise their full option).

AdvancePierre markets and distributes 2,600 different stock-keeping units spanning a range of categories, including ready-to-eat sandwiches, such as breakfast sandwiches, peanut butter and jelly sandwiches and hamburgers; sandwich components, such as fully-cooked hamburger and chicken patties and Philly steaks; and other entrees and snacks, such as country fried steak, stuffed entrees, chicken tenders and cinnamon dough bites.

In the fiscal year ended Dec. 31, 2015, sandwiches and the sandwich components category accounted for two thirds of sales. The company’s products are shipped frozen to customers and under various commercial, retail, store and licensed brands.

According to the prospectus filed with the Securities and Exchange Commission in connection with the offering, AdvancePierre net income in 2015 totaled $37.1 billion, sales were $1.6 billion, and adjusted EBITDA was $260.2 million. Compound annual growth between fiscal 2013 and 2015 was 3.9 percent for sales and 26.2 percent for EBITDA.

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