Mexican supermarket chain BBB Foods Inc. has shown impressive growth potential, prompting a boost in the size and price range of its initial public offering (IPO). With a projected compounded annual growth rate of 34.4% from 2020 to 2022, BBB Foods TBBB has caught the attention of Wall Street.
The Mexico City-based company has chosen to trade under the symbol TBBB on the New York Stock Exchange. Its name, BBB, stands for Bueno, Bonito y Barato in Spanish, which translates to good, nice, and affordable.
Initially estimated at $14.50 to $16.50 per share, BBB Foods has increased its price range to $16.50 to $17.50 per share. The offering size has also been raised from 28.05 million shares to 33.66 million shares, as per the latest filing on Thursday. It is important to note that the additional 5.61 million shares will come from existing BBB Foods shareholders such as Quilvest Capital Partners and will not provide proceeds to the company itself.
With JPMorgan, Morgan Stanley, BofA Securities, ScotiaBank, and UBS as underwriters, BBB Foods aims to raise about $572 million at the midpoint of the proposed price range. The scheduled start of trading for BBB Foods shares is Friday, according to IPOScoop.com.
While currently operating approximately 2,300 stores, BBB Foods envisions the possibility of expanding its market presence in Mexico to up to 12,000 stores. The company sees a significant opportunity for growth due to favorable demographic trends, the under-penetration of hard discount stores in the Mexican grocery market, and increasing appeal of hard discount stores among Mexican consumers.
For the nine months ending on September 30, BBB Foods reported a reduced loss of $11.87 million, compared to the previous year’s loss of $32.1 million. Meanwhile, its revenue stood at $1.8 billion, slightly lower than the $1.85 billion reported in the same period the year before.
Although the IPO market is currently more receptive than in 2023, it still presents some uncertainties. This was evident when luxury ski and clothing brand Perfect Moment Ltd. (PMNT) experienced a decline in its stock-market debut on Thursday.
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