logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

IPO Report: Sprouts Farmers Markets (SFM)

By  +Follow July 31, 2013 12:02PM
Share:
Tickers Mentioned:

Business

Sprouts Farmers Markets ($SFM) is a specialty food retailer that competes with Whole Foods (WFM) , Natural Grocers by Vitamin Cottage (NGVC) , Trader Joes and some Target markets.  SFM stores are clustered in the southwest.

As of July 19, 2013, SFM had 163 stores located in eight states.

SIx other IPOs were scheduled for the week of July 29. The full IPO calendar can be found at IPOpremium.

SFM is based in Phoenix, AZ, and scheduled a $278 million IPO with a market capitalization of $2.16 bilion at a price point mid-range of $15, for Thursday, August 1. 2013.

S-1 filed July 22, 2013

Manager, Joint Managers:  Goldman; Credit Suisse; BofA Merrill
Co-Managers:  Apollo Global; Barclays;Deutsche; UBS; Guggenheim; Wolfe Research Securities


Valuation

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

Profit

annualizing Q1 ’13

Cap (mm)

Sls

Erngs

BkVlue

TanBV

Margin

Sprouts Farmers Markets (SFM)

$2,160

0.9

27.0

6.2

-10.6

3.5%

Whole Foods (WFM)

$20,440

1.7

36.0

5.6

7.1

4.7%

Natural Grocers by Vitamin Cottage (NGVC)

$807

1.9

62.7

10.2

10.3

3.0%

Glossary

SFM is priced at a price-to-sales and P/E discount relative to WFM and NGVC.

Conclusion

Buy SFM on the IPO.

Half the stores were not Sprouts Stores

In 2002, Sprouts Farmers Markets, LLC, an Arizona limited liability company opened the first Sprouts Farmers Market store in Chandler, Arizona. In 2011, SFM was formed when Sprouts Arizona combined with Henry’s Holdings, LLC,  which operated 35 Henry’s Farmers Markets stores and eight Sun Harvest Market stores. 

The Henry’s Transaction was led by investment funds affiliated with, and co-investment vehicles managed by, Apollo Management VI, L.P. The Apollo Funds are affiliates of Apollo Global Management, LLC.  In May 2012, SFM acquired Sunflower Farmers Market, Inc., which operated 37 Sunflower Farmers Market stores.

There were 80 non-Sprout stores which are now being marketed as ‘Sprout’ stores, out of 154 total stores as March 31, 2013.

Seasonality

SFM’s business is subject to modest seasonality. Average weekly sales fluctuate throughout the year and are typically highest in the first half of the fiscal year. Produce, which contributes 25% of net sales, is generally more available in the first six months of the fiscal year due to the timing of peak growing seasons.

Competition

Competition includes conventional supermarkets such as Kroger and Safeway, as well as other food retailers such as Whole Foods, Natural Grocers by Vitamin Cottage and Trader Joe’s.  In some markets Target is also a competitor.

5% stockholders pre-IPO

Apollo Funds, 52%
SFM Liquidating Trust, 36%
KMCP Grocery Investors, LLC, 7%

Use of proceeds

SFM expects to net $248 million from the IPO from selling 17.7 million shares.  Shareholders expect to sell 797,785 shares.

Proceeds are allocated to repay debt.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

Results for SFM
TLT
1 Sep 14 19:00:52
Although there is some indecision in the charts I like the "good supermarket" basket here. This is not a fad. $WFM $TFM $SFM
Business Updates
1 Sep 14 16:45:55
$SFM: UPDATE: Wedbush Initiates Coverage On Sprouts Farmers Market http://t.co/EOE4O3pGFN http://t.co/zmklEN3BW7
Business News Watch
1 Sep 14 15:46:18
$SFM: Sprouts Farmers Market Announces Pricing of Public Offering by Selling Stockholders http://t.co/xachC96TRl http://t.co/DBKD4QPwWf
AlphaNotBeta
1 Sep 14 15:10:25
$SFM Seeing it for the first time right now, $WFM has nothing to worry about...this place is like a Publix. Trader Joe's is even better.
4-traders.com
1 Sep 14 08:57:49
Sprouts Farmers Market : to Present at the Goldman Sachs 21st Annual Global Retailing Conference http://t.co/NUPwJ53OFo $SFM
Ticker Report
29 Aug 14 10:32:11
Sprouts Farmers Market CFO Amin N. Maredia Sells 45,000 Shares $SFM http://t.co/UZLtjFNHP7
DDR Corp.
29 Aug 14 07:40:15
.@Webush starts @SproutsFM at Outperform on strong runway for new store/market share growth: http://t.co/C7D1Pn0A6F #retail #REITs $SFM $DDR
InterCooler
29 Aug 14 02:50:42
Sprouts Farmers Market Receives New Coverage from Analysts at Wedbush $SFM http://t.co/hGGJWZlEeA
Stock News Guru
28 Aug 14 16:46:10
$SFM: Investor Stock Updates: McDonald's Corporation (NYSE:MCD), Sprouts Farmers ... http://t.co/aOcFXAgOM1 http://t.co/DScHbPNnWr
Stock Signaling
28 Aug 14 15:31:31
Upgraded Stocks Active After Hours: $DSW $LCI $JPM $PGR $AFSI $BMO $ARUN $ICPT $ACHN $MBI $SPLK $ARE $SFM $TFM $QUNR http://t.co/Vtx6dLy0Nw
Teresa Go
28 Aug 14 15:11:40
@pennyjgo @janlouisgo sitting inside Sprouts Farmers Market $SFM, like you said enjoying the free air conditioning .
KarateBoy
28 Aug 14 13:51:53
@harfangcap Just a reminder to all: 8/6/2013: $SFM completes its IPO, selling shares for $18.00. Why pay moar? @BarbarianCap
KarateBoy
28 Aug 14 13:14:34
@_KarateBoy_ This report is mind-boggling. He really hammers the negative industry trends but somehow $SFM will rise above? #FantasyLand
Solarya
28 Aug 14 08:58:14
While Whole Foods Wilts, Other Organic Food Sellers Bloom http://t.co/qLNHLNpjVF via @daily_finance $WFM $SFM $AMZN
Stock News Guru
28 Aug 14 07:46:22
$SFM: Specialty Food Retailers Rise On Heels Of Fresh Market Q2 Results http://t.co/rx7CjQKKBQ http://t.co/4X865bdSjb
TheStreet Alerts
28 Aug 14 06:49:44
How Will Sprouts Farmers Market $SFM Stock React To This New Coverage? http://t.co/PfacdZIrqZ
KarateBoy
28 Aug 14 06:44:06
@_KarateBoy_ $SFM (OUTPERFORM) $TFM (NEUTRAL) $WFM (NEUTRAL) and $NGVC (NEUTRAL)
Stock Signaling
28 Aug 14 02:31:15
Services Sector: Upgrades: $UAL $CACI $CACQ $THI $RCII $G $MPEL $PIR $BKW $TXRH $OSTK $FWM $SFM $SFLY $VIPS http://t.co/Vtx6dLy0Nw #stocks
US Banking News
27 Aug 14 16:55:01
Sprouts Farmers Market CFO Amin N. Maredia Sells 45,000 Shares $SFM http://t.co/DZAXK44F9e
Sleek Money
27 Aug 14 16:45:21
Sprouts Farmers Market CFO Amin N. Maredia Sells 45,000 Shares $SFM http://t.co/RvCoThO4Yz
Market Compass
27 Aug 14 15:45:52
$SFM: Sprouts Farmers Market, Inc. Reports Second Quarter 2014 Results http://t.co/cusRFTbM7e http://t.co/phL6NBuXM0
US Banking News
27 Aug 14 15:35:44
Sprouts Farmers Market Now Covered by Analysts at Wedbush $SFM http://t.co/M9L1HGPg7x
Stock Signaling
27 Aug 14 15:31:20
Upgraded Stocks Active After Hours: $JPM $PGR $AFSI $BMO $ARUN $ICPT $ACHN $MBI $SPLK $ARE $SFM $TFM $QUNR $SEP $DB http://t.co/Vtx6dLy0Nw
Sleek Money
27 Aug 14 15:23:07
Sprouts Farmers Market Coverage Initiated by Analysts at Wedbush $SFM http://t.co/UdLNnN6Noe
InsiderTradingWire
27 Aug 14 15:20:08
Amin Maredia N., Chief Financial Officer of Sprouts Farmers M Sells $1,370,012 Worth of $SFM - #Form4 ... - http://t.co/GucFTSiqwN
Analyst Ratings
27 Aug 14 15:19:07
Sprouts Farmers Market initiated by Wedbush at neutral. http://t.co/9YvYjMNc5c $SFM #SFM
Ticker Report
27 Aug 14 15:14:47
Sprouts Farmers Market Now Covered by Analysts at Wedbush $SFM http://t.co/PpMxp6cWXK
US Consumer News
27 Aug 14 15:12:54
Sprouts Farmers Market initiated by Wedbush at neutral. http://t.co/u8FSbgtNrO $SFM #SFM
Wedbush Securities
27 Aug 14 13:43:52
Wedbush initiates coverage on $SFM @sproutsfm
SIAnalystWire
27 Aug 14 13:35:43
Wedbush Starts Sprouts Farmers Market $SFM at Outperform, Other Organic Grocers Rated Neutral $WFM ... http://t.co/YKBzoPDhKm
Stock News Updates
27 Aug 14 11:46:03
$SFM: Stocks Trading Actively: Sprouts Farmers Market Inc (SFM), The Gap Inc. (GPS ... http://t.co/Knoe9RTj4j http://t.co/2UhEZrh8g1
BullTrade Corp.
27 Aug 14 11:05:21
Specialty food worth a shot here, charts setting up well. $SFM $TFM $WFM
TLT
27 Aug 14 08:58:00
@CAMAR024 What's your take on $SFM? Thinking about getting some calls on a pb. Like the company. Think it will outpace $WFM in growth.
FonsieTrader
27 Aug 14 04:35:43
Bullish MACD Crossovers 2/2 $KOPN $LPI $MDRX $MM $MNKD $MPEL $NGD $SEIC $SFM $TMUS $WAG http://t.co/MszBzN5iBs
Stock Signaling
27 Aug 14 02:31:25
Services Sector: Upgrades: $G $MPEL $PIR $BKW $TXRH $OSTK $FWM $SFM $SFLY $VIPS $EGLE $TFM $GPS $PNRA $BCO http://t.co/Vtx6dLy0Nw #watchlist
MacKaySatterlee
26 Aug 14 21:12:10
☯Gain Followers ☯RT This ☯MUST FOLLOW ME I FOLLOW BACK ☯Follow everyone who rts ☯Gain #FOLLOWBACK #ANDROID #ANDROID $sfm
Stock News Updates
26 Aug 14 16:46:05
$SFM: Stocks Trading Actively: Sprouts Farmers Market Inc (SFM), The Gap Inc. (GPS ... http://t.co/Knoe9RTj4j http://t.co/MpZPD3clmh
Stock Signaling
26 Aug 14 15:31:14
Upgraded Stocks Active After Hours: $ARUN $ICPT $ACHN $MBI $SPLK $ARE $SFM $TFM $QUNR $SEP $DB $MDT $SIGM $MRVL $NBG http://t.co/Vtx6dLy0Nw
FonsieTrader
26 Aug 14 15:18:20
#Bullish MACD Crossovers 2/2 $GLOG $HAL $ICE $LPI $MDRX $MM $MNKD $MPEL $NGD $SEIC $SFM $TMUS $WAG http://t.co/TtuyZDcjc0 $STUDY
Brattle St. Capital
26 Aug 14 14:03:31
@_KarateBoy_ @BarbarianCap I like $SFM in theory as a short but am worried they really are taking share from $WFM + KR/SWY
KarateBoy
26 Aug 14 13:58:58
@BarbarianCap The Apollo secondary knocked the wind out of $SFM. Stock has barely moved since then while market rallies. Why pay moar?
Stock Signaling
26 Aug 14 02:31:11
Services Sector: Upgrades: $PIR $BKW $TXRH $OSTK $FWM $SFM $SFLY $VIPS $EGLE $TFM $GPS $PNRA $BCO $aeo $DNKN http://t.co/Vtx6dLy0Nw #nasdaq
Business Headlines
25 Aug 14 20:45:57
$SFM: Technical Pointers on Food Retail Equities -- Whole Foods Market, SUPERVALU ... http://t.co/8CfH6DMcVA http://t.co/UIK8mfGAh7
True To You Services
25 Aug 14 20:21:04
Specialty Food Retailers Rise On Heels Of Fresh Market Q2 Results $FWM $SFM $TFM http://t.co/PUEoPfNY54 #glutenfree #vegan #allnatural
Roozbeh Pedramzad
25 Aug 14 17:19:58
$wfm $sfm these two stocks are ready for a rally. Prices will be head higher in the Fall as shoppers choose organic, healthy food options.
Stock Signaling
25 Aug 14 15:31:14
Upgraded Stocks Active After Hours: $ACHN $MBI $SPLK $ARE $SFM $TFM $DB $MDT $SIGM $MRVL $NBG $PHH $KING $TWTR $LLY http://t.co/Vtx6dLy0Nw
Stock Signaling
25 Aug 14 14:31:14
Upgraded Stocks Trading in a New Range: $BKW $AMTD $BPZ $ATHL $ICPT $CBOE $ARUN $ELGX $TSLA $X $FWM $SFM $ECOM $ACHN $EJ #nasdaq #nyse #mkt
				
				
By  +Follow July 31, 2013 12:02PM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.