Smart & Final keeps expanding after stock sale

Smart & Final’s largest shareholder has further reduced its ownership stake in the profitable and growing company by 10 million shares, but still maintains majority control as the retailer pursues ambitious plans in 2015.

The planned offering of 10 million shares priced at $18.50 a share comes less than seven months after Smart & Final went public by offering 15.5 million shares at $12 a share. Shares sold in the recent offering are owned by Smart & Final’s majority owner, Ares Management, with no proceeds going to the company. The transaction is expect to close April 20, at which time Ares will continue to own 61% of the company’s nearly 74 million shares outstanding after the offer. Ares Management acquired Smart & Final in October 2012 in a deal valued at $975 million.

The stock sale follows the release of fourth quarter results in mid-March, which saw Smart & Final sales increase 13% to $839 million and same store sales increase 7.8%. Full-year sales increased 10.1% to more than $3.5 billion, and same store sales increased 6.3%. Net income on an adjusted basis grew 50.3% to $12.3 million, or 16 cents a share, during the quarter and advanced 46% to $46.5 million, or 73 cents a share, for the year.

In addition to the record results, the company expanded its store portfolio by opening 13 Smart & Final Extra! stores, completing 16 conversions of legacy Smart & Final stores to the Smart & Final Extra! format and opening one new Cash & Carry store. The company ended the year with a total of 98 Smart & Final Extra! and 103 legacy Smart & Final stores, and 53 Cash & Carry stores.

The company operates a total of 258 stores in six Western states, but 198 of the units are concentrated in California. Twenty-two new stores are expected to open this year, including four locations that have already opened.