Milwaukee-based Roundy's Inc. today launched its initial public offering of 19.2 million shares of common stock priced $8.50 per share.
The shares are traded on the New York Stock Exchange under the ticker symbol “RNDY.”
Roundy's is offering 14.7 million shares of common stock and selling stockholders are offering 4.5 million shares of common stock. The underwriters have a 30-day option to purchase up to an additional 2.9 million shares from the selling stockholders to cover over-allotments.
Roundy's expects to receive proceeds, net of underwriters' discount and commissions and estimated offering expenses payable, of approximately $111.15 million from the offering.
The company intends to use the net proceeds, together with borrowings under its new senior credit facility, to repay all of its outstanding borrowings and other amounts owed under its existing credit facilities.
David Livingston, a grocery industry analyst and a former market research manager for Roundy’s, was not impressed with today’s IPO.
“At that price ($8.50), obviously Wall Street doesn’t have a lot of confidence in it,” Livingston said. “It’s probably not a good investment…I don’t think it’s going to change much, being public. They are kind of in a survival mode right now. They have a lot of challenges. They are still facing an onslaught of new competitors, they have debt to repay, and now they’ve committed to this dividend. I think that getting the cash, it helps them last a little longer. It’s business as usual for the time being.”
Walmart plans to open several new stores with groceries in the Milwaukee area and in Chicago and the Twin Cities, which will cut into Roundy’s market share, Livingston said.
Roundy’s also faces competition from Woodman’s Foods, Piggly Wiggly Stores and Sendik’s Food Markets, among others.
“Once all of these Walmarts open, and the next Woodman’s opens (in Waukesha), then we’re going to see (Roundy’s) start to make changes,” Livingston said. “I don’t know what those are going to be, but I’m sure we’ll see some store closings. I think you might see them sell the warehouse (in Oconomowoc). There will probably be layoffs.”
Roundy’s has about $800 million in debts, Livingston said. “They’d like to pay down the debt.”
Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC, along with Jefferies & Company Inc. and Robert W. Baird & Co. Inc. of Milwaukee, are acting as joint book-running managers for the offering. Moelis & Company LLC acted as financial advisor to Roundy's.
Roundy's is a leading grocer in the Midwest with nearly $4.0 billion in sales and more than 18,000 employees. Founded in Milwaukee in 1872, Roundy's operates 159 retail grocery stores and 99 pharmacies under the Pick 'n Save, Rainbow, Copps, Metro Market and Mariano's Fresh Market retail banners in Wisconsin, Minnesota and Illinois.

Oak Creek acting Mayor Al Foeckler, who was recently appointed by the Common Council following the death of Dick Bolender, cast the deciding vote Tuesday night to move the city hall and library to the former Delphi site.
Foeckler cast his vote after the council deadlocked in a 3-3 tie, according to OakCreekPatch.com.
"With great respect for Mayor Bolender, Mayor Bolender's vision for the Delphi site and the thousands of residents that voted Mayor Bolender to three terms as mayor of Oak Creek, I vote aye," Foeckler said in casting the deciding vote to move forward plans to relocate the city hall and library to the corner of Drexel and Howell avenues.
Voting in favor of the plan were Aldermen Tom Michalski, Ken Gehl and Dan Jakubcyzk.
Aldermen Steve Scaffidi, Michael Toman and Dan Bukiewicz were opposed, saying they needed more questions answered, specifically from the Oak Creek-Franklin School District.
That's because the next step is to negotiate with the school district on land swaps that, as proposed, would end with the school district exchanging 50 acres of land it owns on Oakwood Road and Howell Avenue with the city for the 12-acre Civic Center site - where the city hall and library now stand at Puetz Road and Howell Avenue.
The city, in turn, would swap the Oakwood land with Wispark, the developer and owner of the Delphi property, for seven acres at Delphi to construct the civic buildings as part of a town-center development.
"It's a win-win-win situation. It's a win at Delphi, it's a win at the corner here (of Puetz and Howell) and it's a win at Howell and Drexel," Foeckler said. "Significant tax base being generated, significant number of jobs being generated.”
For ongoing coverage, visit www.oakcreekpatch.com, a media partner of BizTimes.

Wheaton Franciscan Healthcare has given up its stake in Affinity Health System to Ministry Health Care. Effective today, Ministry has assumed sole sponsorship of Affinity, which it had co-sponsored with Wheaton since 1996.
The Affinity network is based in the Oshkosh and has 4,000 employees at three hospitals, 26 clinics, and a medical group of almost 300 providers in the Fox Valley. Milwaukee-based Ministry has clinics and hospitals throughout Wisconsin, mostly in the northern half of the state.
“The assumption of sole sponsorship by Ministry will extend our health care delivery footprint into a contiguous geographic market,” said Nick Desien, president and chief executive officer of Ministry Health Care. “Sole sponsorship brings additional assets to Ministry’s delivery system, which will create cost-saving opportunities, provide additional medical management experience and infrastructure, and better position Ministry to address issues related to health care reform.”
Wheaton has corporate offices in Glendale, Wis., and Wheaton, Ill. Its footprint includes more than 100 sites and 21,000 employees in Wisconsin, Illinois and Iowa.
“Ministry and Wheaton have had a long and successful partnership as co-sponsors of Affinity,” said John Oliverio, Wheaton president and CEO. “In view of the pending challenges of health care reform and federal budget deficits, Ministry approached our organization last year with a proposal to assume sole sponsorship of Affinity. After thoughtful review and discussions, we reached an agreement that will allow Ministry to continue the strong tradition of delivering the Catholic health care ministry to the Fox Valley that was begun by our founding Sisters and fulfills the heritage of Wheaton Franciscan Healthcare and our founders.”

Harley-Davidson Inc. president and chief executive officer Keith Wandell will assume the additional duties of chairman of the company's board of directors, effective immediately.
Wandell was named chairman by board action Tuesday.
"Keith is a transcendent leader who has done an outstanding job of guiding Harley-Davidson in a period of extraordinary challenge and transformation," said Barry Allen, who has served as the company's non-executive chairman since 2009.
"When Keith joined Harley-Davidson as CEO in 2009, the board believed it essential for him to be able to devote his full energy to strategies to move the business forward, without the distraction of Board leadership responsibilities," Allen said. “With the company's tremendous progress under Keith's leadership over the last three years, the board believes the time is right to recombine the roles of chairman and CEO."
Additionally, the board named Richard Beattie as lead director. Beattie has been an outside director of Harley-Davidson since 1996. As lead director, Beattie will head the oversight and monitoring activities of the board that would otherwise be performed by a non-executive chairman.
Wandell joined Harley-Davidson in May 2009 as the company's first outside CEO since 1981. Beginning in fall 2009, the Company embarked on a major new strategy to focus exclusively on the Harley-Davidson brand and transform the company's approach to product development, manufacturing and the retail experience.
Wandell also took hard-line stances to reduce the company’s labor costs as he renegotiated with the company’s unions, which ultimately agreed to salary concessions.
"I am grateful for the confidence the board has placed in me, since I first came to Harley-Davidson, to work with everyone in this great organization to build a bright future for our company," Wandell said. "On behalf of the directors and all our stakeholders, we express our deep gratitude to Barry for his board leadership and we look forward to his continued guidance and contributions as a director."
In other action, the board approved a cash dividend of $0.155 per share for the first quarter of 2012. This represents a 24 percent increase over the fourth quarter 2011 dividend ($.125) and a 55 percent increase over the first quarter 2011 dividend ($.100). The dividend is payable March 2, to the holders of record of the company's common stock on Feb. 21.

Walmart announced plans Tuesday to build a new 24-hour SuperCenter store in Merrill that will add more than 100 jobs and provide a tax boost to a community that has one of the highest unemployment rates in the state. Pending city approval, construction is slated to begin this summer on a new, 120,000-square-foot Walmart store. Read more in today’s BizTimes Wisconsin Morning Headlines bulletin.

Schlitz Park in downtown Milwaukee announced Tuesday that a “national services and technology provider to the financial services industry” has signed a lease for 18,000 square feet of space in the Bottlehouse A building. The tenant declined to have its name disclosed in the lease announcement. The company will move 50 employees to Schlitz Park from a suburban Milwaukee location. Read more in the new edition of the BizTimes Real Estate Weekly bulletin.

Have you applied for a permit to conceal and carry a weapon in Wisconsin? Answer today’s Milwaukee Biz Poll question and view the results so far at www.biztimes.com.

Business executives in and out of Wisconsin stepped up with significant donations to help Gov. Scott Walker fight a recall. Read more about who is supporting Walker in today’s Milwaukee Biz Blog by BizTimes executive editor Steve Jagler.