The IPO Buzz: Mexico’s BBB Foods Launches $434.8 Million IPO

Mexico’s hard discount grocery store chain BBB Foods Inc. (TBBB Proposed) set terms for its IPO today and launched the deal for pricing next week. BBB Foods’ no-frills grocery stores are in the same category as Germany’s Aldi and Lidl chains. The Mexico City-based discount grocery chain plans to offer 28.05 million Class A ordinary shares at a price range  of $14.50 to $16.50 to raise $$434.78 million, according to its F-1/A filing dated Feb. 2, 2024. The IPO is scheduled to price late next week – on Thursday night, Feb. 8, 2024, to trade Friday, Feb. 9, on the New York Stock Exchange.

The 3B name refers to “Bueno, Bonito y Barato” – a Mexican saying that translates to “Good, Nice and Affordable,” the prospectus says.

J.P. Morgan, Morgan Stanley, BofA Securities, Scotiabank and UBS Investment Bank are the joint book-runners.

If the IPO is priced at the  $15.50 mid-point of its range, BBB Foods Inc. would have a market cap (valuation ) of $1.74 billion.

BBB Foods plans to use most of the IPO proceeds to repay debt, the prospectus says.

“We are pioneers and leaders of the grocery hard discount model in Mexico and one of the fastest-growing retailers in the country, as measured by our sales and store growth rates,” the prospectus says.

At year-end 2023, BBB Foods Inc. had 2,288 stores – up from 1,249 stores at the end of 2020.

The Tiendas 3B product range consists of about 800 stock keeping units (SKUs) of branded, private label and spot products.

For the 12-month period that ended Sept. 30, 2023, BBB Foods reported a net loss of $10.79 million on revenue of $2.34 billion. (Those figures are in U.S. dollars converted from Mexico’s peso.)

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