Roundy's Plans To Take Company Public with IPO

The privately held operator of Pick 'n Save and other supermarkets chains, which had tried to find a buyer in recent years, is now planning to become a publicly traded company through a stock sale valued at $230 million.

Roundy's Parent Co. has created a preliminary prospectus outlining plans for an initial public offering, according to documents filed Monday with the US Securities and Exchange Commission.

Roundy's, based in Milwaukee, operates 158 stores in Wisconsin, Minnesota and Illinois. It has 17,761 employees, according to the prospectus.

The company posted net income of $46.2 million on revenue of $3.77 billion last year. During the first three quarters of 2011, Roundy's earned $38.9 million on revenue of $2.87 billion.

The filing comes after plans to sell Roundy's in 2007 were dropped because of the recession. Roundy's, led by Chairman and CEO Robert Mariano, has been owned by Chicago-based investment firm Willis Stein & Partners since 2002.

Pick 'n Save has long been the dominant supermarket operator in southeastern Wisconsin, especially after Kohl's Food Stores closed and Jewel left the Milwaukee market in recent years.

In the Milwaukee area, Pick 'n Save is the No. 1 supermarket chain, with a 55 percent market share, the prospectus says.

But Pick 'n Save has been facing increased competition from Walmart, Target and Woodman's.

Walmart and Woodman's have been adding stores in southeastern Wisconsin, while Target has been remodeling stores to add more food items.

Also, Sendik's Food Markets has been adding stores.

As a result, Pick 'n Save's market share will likely be declining, said David Livingston, a supermarket industry consultant.

"When you have 20 new stores coming into the market, there's only one way to go," said Livingston.

While the company's revenue increased 2.1 percent during the first three quarters of 2011 compared to the year-earlier period, its same-store sales increased at a much lower rate, of just 0.2 percent.

Roundy's operates 93 Pick 'n Save stores, mainly in southeastern Wisconsin and the Fox Valley, along with 26 Copps stores in central Wisconsin.

The company's second-largest market is in the Minneapolis area, where it operates 32 Rainbow stores. Rainbow is the third-largest chain in that area.

Roundy's also operates three high-end Metro Market stores in Wisconsin, and four Mariano's Fresh Markets in the Chicago area. The company plans to add four to five more Chicago-area Fresh Markets over the next five years.

Roundy's plans to use proceeds from the stock sale to pay down part of its corporate debt, which totals around $800 million, according to the prospectus.

The company has 16,199 employees at its stores, with 1,021 employees at its Kenosha commissary and distribution centers in Oconomowoc, Mazomanie and Stevens Point. It also has 541 employees at its downtown Milwaukee headquarters.