Mexican grocery-store chain BBB Foods ups price and deal size in signs of bullish IPO

By Steve Gelsi

BBB Foods, which stands for 'good, nice and affordable' in Spanish, eyes $572 million in IPO proceeds

Rapidly-growing Mexican supermarket chain BBB Foods Inc. has boosted the size and price range of its initial public offering, in a bullish sign for its expected pricing for trade on Friday.

With a compounded annual growth rate of 34.4% between 2020 and 2022, BBB Foods (TBBB) appears to have Wall Street salivating.

The Mexico City-based company plans to trade under the symbol TBBB on the New York Stock Exchange.

The BBB in its name stands for Bueno, Bonito y Barato in Spanish, and translates to good, nice and affordable.

The company increased its estimated price range to $16.50 to $17.50 a share, up from its earlier range of $14.50 to $16.50.

The company also boosted the size of the offering to 33.66 million shares from 28.05 million shares, according to a filing on Thursday.

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 the 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 ended Sept. 30, BBB Foods reported a narrower loss of $11.87 million on revenue of $1.8 billion, compared to 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, but still choppy.

On Thursday, luxury ski and clothing brand Perfect Moment Ltd. (PMNT) fell in its stock-market debut.

Also read: Luxury skiwear company Perfect Moment's stock sinks in trading debut

-Steve Gelsi

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02-08-24 1557ET

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