Smart & Final begins public trading

Smart & Final, the Commerce, Calif.-based non-membership warehouse chain, raised more than $160 million in the company's first day of trading common stock on the New York Stock Exchange.

The company offered 3.5 million shares at $12 per share in its initial public offering Wednesday, and finished the day trading at $12.01. The stock, trading under the symbol SFS, went as high as $13.42 as share volume reached 12,140,000.

Smart & Final said it also granted the underwriters of the IPO an option to purchase up to 2 million additional shares of common stock.

The offering is expected to close next Monday.

Dave Hirz (second from left), president and CEO of Smart & Final, launches trading on the company's common stock, flanked by Richard Phegley, Smart & Final's CFO; Dennis Gies, principal in Ares Managmenet, which owns the majority stake in Smart & Final; and David A. Ethridge, SVP and head of the Capital Markets Group at NYSE Euronext.

Sales for the company’s 250 stores are estimated at $2.5 billion. The company operates the majority of its stores under the Smart & Final banner in California, Arizona, Nevada and Idaho, with the balance operating under the Cash & Carry Smart Foodservice banner in Oregon and Washington; it also operates 13 joint-venture stores in Northern Mexico whose sales are not included in the company’s totals.

The company was purchased in late 2011 by Ares Management LLC, Los Angeles, for Apollo Global Management, New York, for an estimated price of $975 million.

Under Apollo, Smart & Final upgraded customer service in a move to broaden its appeal beyond business patrons to more general consumers; boosted store size from 17,000 square feet to 25,000 square feet; rationalized inventories to eliminate slow-moving items; increased its produce offerings; added a wall of values; and increased advertising to a weekly basis from every other week.

The company also opted not to expand its Cash & Carry format from the Pacific Northwest into California after testing at three locations; and it pulled back from expanding into Denver in mid-2010 within five months of opening five stores there.

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