Discount retailer Dollar General Corp. (DG) announced Thursday it has priced its initial public offering or IPO, for 34.10 million shares of its common stock at $21 per share, being the lower end of the pricing range announced. The company's common shares are expected to begin trading on Friday, November 13, on the New York Stock Exchange under the ticker symbol "DG". Dollar General sold a total of 34.10 million shares for gross proceeds of $716.1 million.
Dollar General, owned by private-equity firm Kohlberg Kravis Roberts & Co. L.P. or KKR, sold 22.70 million shares, while existing shareholders sold 11.40 million shares. The IPO's underwriters have a 30-day option to purchase up to 5.12 million of additional common shares from the selling shareholders at the IPO price, less the underwriting discount.
Dollar General, the largest discount retailer in the U.S. with 8,577 retail store chain, will not receive any net proceeds from the sale of shares by existing shareholders, including any shares sold pursuant to the option. Meanwhile, Dollar General expects to receive net proceeds from the offering of about $445.2 million, after deducting underwriting discounts and estimated offering expenses. The company intends to use proceeds to redeem a portion of its outstanding senior subordinated and senior notes.
Dollar General, which in August filed for its intention to go public, is now a subsidiary of Buck Holdings, L.P., a Delaware limited partnership controlled by KKR. Dollar General's common stock was publicly traded from 1968 until July 2007, when it merged with an entity controlled by investment funds affiliated with KKR.
The Dollar General IPO is seen to be the largest by a retailer in the current IPO pipeline, and is backed by private equity firm Kohlberg Kravis Roberts & Co. The offering would value Dollar General higher that well known peers like Target Corp. (TGT), Wal-Mart (WMT) and Dollar Tree, Inc. (DLTR).
At the current offering price for the Dollar General IPO, Dollar General would be valued at about 19.4 times its full year 2009 earnings, according to IPOdesktop.com. This would be higher than the valuations of 14.8 times earnings at Wal-Mart and 18.3 times earnings at both Target and Dollar Tree. For the 2009 half-yearly period, Dollar General reported 13.3% growth in net sales to $5.7 billion from last year, with a profit of $176.6 million.
Citi, Goldman, Sachs & Co. and KKR, along with BofA Merrill Lynch and J.P. Morgan, are serving as joint book running managers for the Dollar General offering, with Barclays Capital, Wells Fargo Securities, Deutsche Bank Securities and HSBC acting as co-managers.
A few more retailers are queuing up to test the IPO markets again after a lull of two years, emboldened by better consumer spending outlook and upbeat stock market. Beauty products chain Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA) was the last retailer to go public with a $153.7 million IPO back in October 2007. However, the retailers need to gain investor confidence by showcasing low-debt balance sheets, amid the lingering economic slowdown, which has curbed investor appetite for IPOs by retailers in particular as they are highly leveraged.
North Bergen, New Jersey-based specialty retailer Vitamin Shoppe, Inc. (VSI), that operates 434 health supplement stores in the U.S., priced its about 9.1 million shares IPO at $17.00 per share, which was above its previously expected range of $14.00 to $16.00 per share, for net proceeds about $121.2 million. It began trading on the New York Stock Exchange Wednesday, October 28, under the ticker symbol "VSI". This was the first of the three private-equity held retailer IPO's expected recently.
Another one in the offing is from one of the fast-growing, relatively debt-free retailer youth clothing chain rue21, Inc. (RUE), which operates 500 stores in the U.S, and owned by funds advised by private equity firm Apax Partners LLP and BNP Paribas North America Inc.
rue recently filed its plan to go public, and earlier in the day priced its about 6.77 million shares IPO at $19.00 per share, which was above its previously expected range of $16.00 to $18.00 per share. The company said it is offering 1.65 million shares of common stock, and certain selling stockholders are offering 5.12 million shares in the offering. The company's common shares are expected to begin trading on Friday, November 13, on the Nasdaq Global Select Market under the symbol "rue". Funds advised by Apax Partners and BNP Paribas North America, Inc. are the main stockholders of rue21.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.