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IPO Report: Sprouts Farmers Markets (SFM)

By  +Follow July 31, 2013 12:02PM
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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for SFM
Lucas Isely
30 Mar 15 22:54:16
#SproutsFarmersMarket $SFM potential #acquisition or #merger look @ this #confidentialtreatmentorder #SEC #Rule24b https://t.co/rYpsiPvoo4
StockNewsWires
30 Mar 15 20:40:02
$SFM: Insider Selling: Sprouts Farmers Market CEO James Douglas ...: http://t.co/JAznGBAP1l
WKRB News
30 Mar 15 20:37:53
Insider Selling: Sprouts Farmers Market CEO James Douglas Sanders Sells 263,334 Shares of Stock $SFM http://t.co/TNYn1PBI27
Dakota Financial
30 Mar 15 19:51:15
Sprouts Farmers Market CEO Sells $8,734,788.78 in Stock $SFM http://t.co/mK8FD1CNPl
US Banking News
30 Mar 15 19:28:18
Sprouts Farmers Market CEO Sells $8,734,788.78 in Stock $SFM http://t.co/1gNsV56YTp
Ticker Report
30 Mar 15 19:26:22
Sprouts Farmers Market CEO Sells $8,734,788.78 in Stock $SFM http://t.co/aAhcHQakqD
ProTradersNews
30 Mar 15 19:20:03
$SFM: Sprouts Farmers Market CEO Sells $8734788.78 in Stock (SFM): http://t.co/W8bmut9GDO
Breaking News Now
30 Mar 15 15:29:02
$SFM: New Insider Transaction on SFM by President and CEO: http://t.co/etk6PBTpMA
Insider Alerts
30 Mar 15 15:28:08
NEW insider transaction on $SFM reported a moment ago: http://t.co/mnwLgLGlwN
NASDAQ
30 Mar 15 15:28:01
$SFM - Statement of Changes in Beneficial Ownership (4) http://t.co/3pygEZSBXE
InsiderTradingWire
30 Mar 15 15:25:17
James Sanders Douglas Pres and CEO Sells $7,858,063 Worth of $SFM Sprouts Farmers Market, Inc. - #Form4 ... - http://t.co/3wOSvIuTSK
Insider Filings
30 Mar 15 15:25:04
$SFM: Sanders James Douglas sold a net $7,858,063 in Sprouts Farmers Market, Inc.. http://t.co/d3iSsJoMKE
Lucas Isely
30 Mar 15 13:29:05
#SproutsFarmersMarket setting #LuckysMarket up for an acquisition placing former exec #SteveBlack as President http://t.co/pTM5HomiGp $SFM
Jeff Siegel
30 Mar 15 09:45:04
Egg Regulations and the Absurdity of Arkansas Politicians: http://t.co/jbCZ6bWLuk #animalcruelty #Eggs $WFM $SFM #FoodSovereignty
Capital Market Labs
28 Mar 15 19:08:03
$SFM EPS is Accelerating. Chart: http://t.co/JUB5KLciOI https://t.co/WBVhi8WI8o
dailystockplays.com
28 Mar 15 11:11:57
RSI Oversold http://t.co/x6Md9tgzV8 $TSM $XLK $SWFT $ARMK $BLMN $CEMP $AON $COMM $CME $TROW $TEL $FNSR $SFM $INDA $AVT $TCO $KNX $LMCA $MWV
The Legacy News
28 Mar 15 05:42:16
Brokerages Set Sprouts Farmers Market Target Price at $35.49 $SFM http://t.co/4wTl0y0blA
Capital Market Labs
28 Mar 15 00:08:50
$SFM Earnings are Increasing. Chart: http://t.co/LICZFQXuhS https://t.co/mcOVpAzWcU
Boris Brdar
27 Mar 15 10:24:23
$zoes is picking up better off the bottom like $sfm - $tfm hasn't.
James P Worthy
27 Mar 15 08:07:22
$SFM Sprouts Farmers Market, Inc. Short Interest Disclosure http://t.co/tczOZP7hBd
Rod Surley
27 Mar 15 06:40:17
$SFM adding here $33.14. Looking for another run up to $36-$38
Ariane Randolph
26 Mar 15 17:09:10
Battle for fresh food sales to take new direction $SFM $WFM $KR $TFM $NGVC $FWM $TGT $WMT $COST $AMZN http://t.co/7T7LVqAlSw
Capital Market Labs
26 Mar 15 10:32:48
$SFM EPS is Accelerating. Chart: http://t.co/JUB5KLciOI
DarkSkinBen
26 Mar 15 10:14:12
Looks like about 3 days of accumulation going on here with $SFM. No clue which way it's going from here, but it's gonna be a sizable move.
Capital Market Labs
26 Mar 15 07:55:19
Largest Food and Staples Retailing Advertising Margin 1. $WFM 2. $RAD 3. $SFM Full Chart: http://t.co/OtHyeTk2Ls
NASDAQ
26 Mar 15 03:10:17
$SFM - Post-effective Amendment to an Automatic Shelf Registration of Form S-3asr or Form F-3asr (posasr) http://t.co/6Ep2zNrzQ5
DarkSkinBen
25 Mar 15 21:47:18
@WarrenPuffett9 Just need $LOCO and $SFM to give me some breathing room tomorrow. Halved about $4k in losses before today.
NSFoodsMemo
25 Mar 15 18:16:20
March Milestone: @sproutsfm opened its 200th store today http://t.co/1IYVssy5Hn $SFM #grocery #foodretail #retail @jimcramer
DarkSkinBen
25 Mar 15 13:45:27
Still holding $LOCO and $SFM. Down on $LOCO though.
Thomas Collins
25 Mar 15 13:31:43
$SFM Price Losers: NXP Semiconductors NV (NASDAQ:NXPI), Sprouts Farmers ... http://t.co/IAJx46i36Y
Thomas Collins
25 Mar 15 08:32:01
$SFM Price Losers: NXP Semiconductors NV (NASDAQ:NXPI), Sprouts Farmers ... http://t.co/n6xOTL6wEG
Clair Voight
25 Mar 15 08:31:58
$SFM Oversold Conditions For Sprouts Farmers Market (SFM) http://t.co/7PrX77S1aI
DarkSkinBen
25 Mar 15 07:31:42
Just need some good volume on $SFM.
US Banking News
25 Mar 15 06:52:30
Sprouts Farmers Market Given Consensus Recommendation of “Hold” by Analysts $SFM http://t.co/5toabKg6oc
WKRB News
25 Mar 15 06:41:25
Sprouts Farmers Market Given Consensus Recommendation of “Hold” by Analysts $SFM http://t.co/FuGTPqQdVe
US Banking News
25 Mar 15 06:11:27
Sprouts Farmers Market Receives Consensus Hold Rating from Analysts $SFM http://t.co/iMZlJTbh1z
Capital Market Labs
25 Mar 15 05:24:30
$SFM Earnings are Growing http://t.co/DxXZE4SdT4
Stefano
25 Mar 15 04:56:26
RT @theflynews: WhiteWave hits 52-week high following upbeat analyst notes $WWAV $WFM $HAIN $SFM: Full Story http://t.co/0OUffAmewn
Penny Stock Secret
25 Mar 15 04:38:06
Yesterday We Made $94,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $SFM $EBAY $NLST
iChart
25 Mar 15 04:19:53
over 10 Watchlist 03/25/15: $GNMK, $LZB, $MON, $SFM, $SWI
iChart
25 Mar 15 04:19:35
$SFM http://t.co/YpjMH50qRa
DarkSkinBen
24 Mar 15 17:21:51
111,000 share order bought @$33.15 for $SFM after hours, hopefully that's a good sign for tomorrow's open.
DarkSkinBen
24 Mar 15 16:55:45
@ganttman85 Thanks. Eyes on $SFM and $LOCO for tomorrow.
DarkSkinBen
24 Mar 15 08:31:22
@ACInvestorBlog I've got my eye on $SFM, not totally sure what the charts say but it's hovering near 3 month lows. Avian flu holding down?
The Fly
24 Mar 15 08:11:48
WhiteWave hits 52-week high following upbeat analyst notes $WWAV $WFM $HAIN $SFM: Full Story http://t.co/0OUffAmewn
IPO Watch
24 Mar 15 06:35:13
Battle for fresh food sales to take new direction http://t.co/dl13Q3a2z8 $SFM $WFM $KR $TFM
Quantpost Service
24 Mar 15 06:35:13
$WFM News: "Battle for fresh food sales to take new direction $SFM $WFM $KR $TFM" http://t.co/fBiFhzuTHl Quote: https://t.co/qnaUwWBiLi
Consumer Stocks
24 Mar 15 06:35:13
Battle for fresh food sales to take new direction http://t.co/9d8K1Nylub $SFM $WFM $KR $TFM
SA Breaking News
24 Mar 15 06:35:13
Battle for fresh food sales to take new direction http://t.co/ysXLtI2KZE $SFM $WFM $KR $TFM
iChart
24 Mar 15 04:23:36
over 10 Watchlist 03/24/15: $FCX, $NATI, $ROK, $RVNC, $SFM, $TROW
				
				
By  +Follow July 31, 2013 12:02PM
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