BBB Foods Inc. priced its initial public offering at the top of an increased price range for its trading debut on Friday, as Wall Street appeared poised to gobble up shares of the rapidly growing Mexican supermarket chain.
priced 33.66 million shares at $17.50 a share for proceeds of $589 million, at the top of its estimated price range of $16.50 to $17.50 a share.
The stock had not yet opened for trading as of midday Friday.
In a sign of a strong IPO, the company on Thursday boosted its estimated price range from an earlier level of $14.50 to $16.50 a share and also increased the size of the offering to 33.66 million shares from 28.05 million shares.
BBB Foods is offering shareholders a stake in a business with a compound annual growth rate of 34.4% between 2020 and 2022.
The BBB in its name stands for Bueno, Bonito y Barato, which translates to good, nice and affordable.
The additional 5.61 million shares are all coming from existing BBB Foods shareholders, including Quilvest Capital Partners, with no proceeds earmarked for the company itself.
At the midpoint of the proposed price range, BBB Foods will raise about $572 million with underwriters JPMorgan, Morgan Stanley, BofA Securities, ScotiaBank and UBS.
Shares are expected to start trading on Friday, according to IPOScoop.com.
The company currently operates about 2,300 stores but sees market potential in Mexico for up to 12,000 stores.
“We believe that there is a large whitespace opportunity for Tiendas 3B,” the company said. “This opportunity will be driven by market expansion as a result of favorable demographic trends, the under-penetration of hard discount stores in the Mexican grocery market, and hard discount’s growing appeal with the Mexican consumers.”
In the nine months that ended Sept. 30, BBB Foods reported a loss of $11.87 million on revenue of $1.8 billion, compared with a year-earlier loss of $32.1 million and revenue of $1.85 billion.
The deal is coming in an IPO market that’s more receptive than 2023’s, but still choppy.
On Thursday, luxury ski and clothing brand Perfect Moment Ltd.
fell in its stock-market debut.
Also read: Amer Sports stock ends its first day of trading with a 3% gain over its discounted IPO price
And: IPO market continues its revival with investors looking to Amer Sports, BrightSpring — and Reddit