US Foods Climbs After Biggest U.S. Corporate IPO of 2016

Investors Show a Taste for US Foods

US Foods Holding Corp. rose 5 percent in its trading debut after raising $1.02 billion in the biggest U.S.-listed corporate initial public offering of the year.

The food distributor sold 44.4 million shares for $23 apiece, in the top half of the $21 to $24 marketed range, according to data compiled by Bloomberg. At the offering price, US Foods has a market value of about $4.9 billion.

The shares opened at $24.25 Thursday, trading on the New York Stock Exchange under the symbol USFD.

US Foods is going public almost a year after fellow food distributor Sysco Corp. was prevented by regulators from buying the company for about $3.5 billion. It’s the biggest U.S. IPO this year, according to data compiled by Bloomberg that excludes funds and special purpose acquisition vehicles and real estate investment trusts.

Last month, casino operator Red Rock Resorts Inc. priced the second-biggest U.S. offering in 2016, raising $579 million, including an overallotment to underwriters. The number of IPOs in the year to date is the slowest since 2008 as volatility and risk-averse investors have pressured the market.

Most of the proceeds from US Foods’s IPO will go toward paying down debt, the prospectus shows.

KKR & Co. and Clayton, Dubilier & Rice took the company private at the peak of the leveraged buyout boom in 2007 for $7.2 billion. The firms didn’t sell shares in the IPO. After the offering, the two will each hold about 39 percent of the common stock, regulatory filings show.

Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. managed the IPO.

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