DG IPO to Fund Expansion

JON SPRINGER

GOODLETTSVILLE, Tenn. — Dollar General's upcoming initial public offering could provide funding for the potential to more than double the discounter's 8,500 stores.

In a prospectus filed with federal regulators late last month, Dollar General, based here, said its market analysis showed more than 12,000 opportunities for new stores located in the 35 states in which the company already does business, and said it could continue to add new stores at a rate of around 500 a year.

Dollar General is seeking to raise about $750 million in the IPO. In its prospectus, the chain said the IPO would serve to reduce its debt, which was at $4.1 billion as of July 31. It also said it could improve sales and profitability through improved store productivity, as well as through merchandising, sourcing and store renovations.

The IPO — expected to be completed before the end of the year, reports said — would signal a successful turnaround for Kohlberg Kravis Roberts, the private equity firm that acquired Dollar General in 2007 for $7.3 billion, including the assumption of $380 million in debt.

The company while privately held installed a new management team led by former Safeway executive Rick Dreiling, and improved performance through a number of initiatives.