Smithfield Foods Takes a Major Leap with Upcoming IPO
The wait is finally over as Smithfield Foods, the largest U.S. pork producer, has announced the terms of its highly anticipated initial public offering (IPO). With shares expected to price between $23 and $27 each, the company is poised to make a significant impact on the market.
A Market Capitalization of Nearly $10 Billion
At the midpoint of the expected IPO price range, Smithfield Foods is estimated to have a market capitalization of nearly $10 billion. This is a remarkable feat, considering the company’s plans to offer 17.4 million shares, with both Smithfield and its Hong Kong-listed parent company, WH Group, participating in the offering.
Proceeds and Share Structure
The IPO is expected to generate $400.4 million in proceeds, with almost 397.5 million shares outstanding after the offering. This will result in a market capitalization of nearly $10 billion at the midpoint of the offering range, with the high end of the range pushing the market cap to over $10.7 billion.
Financial Performance
Smithfield Foods has reported impressive financial performance, with estimated gross profits ranging from $515 million to $543 million on sales between $3.87 billion and $3.95 billion for the three months ended December 29.
Post-IPO Ownership Structure
After the IPO, WH Group will still own approximately 90% of Smithfield Foods, which has applied to list on the Nasdaq under the ticker “SFD.”
A Favorable Market Environment
The planned IPO comes at an opportune time, as companies going public raised $39.32 billion in the U.S. in 2024, exceeding the total for the previous two years. Market participants are optimistic about 2025, expecting a better year for IPOs, driven by President Donald Trump’s regulatory easing and the Federal Reserve’s interest rate cuts.
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