HOUSTON -- With the updating of prospectus papers filed with the U.S. Securities & Exchange Commission (SEC), Alon Brands is reviving its proposed initial public offering (IPO) of stock and could pull the trigger this year after leaving the plan on the shelf since 2008.
Multiple sources have confirmed for CSP Daily News that Alon Brands is preparing for the IPO, although company CEO Kyle McKeen could not be reached for comment at press time.
According to the latest prospectus filed April 15, the chain of 304 convenience stores is the largest 7-Eleven [image-nocss] licensee in the United States and a leading marketer and supplier of motor fuels in the south central and southwestern United States.
"Our wholesale marketing segment markets and supplies motor fuels under the FINA brand and provides brand support and payment-card processing services to distributors supplying approximately 633 retail locations, including our company-owned stores that sell motor fuel," the SEC document states. "In certain markets outside of our supply network, we also sub-license the FINA brand and provide the same brand support and payment-card processing services to distributors representing approximately 261 additional retail locations. We believe our leading brand offerings, advantageous fuel supply agreement, strong market positions and complementary business model provide us with competitive advantages and position us well for continued growth."
In some ways, Alon Brands has actually gotten smaller since the company first filed IPO prospectus papers in November 2008. At that time, the company reported operating 306 convenience stores, supplying FINA products to more than 1,000 retail locations and sub-licensing the FINA brand to another 100 locations.
For the 12 months ending December 31, 2007, Alon Brands reported its retail segment generated revenues of $480.1 million and gross profit of $88.0 million. In 2010, the company generated revenues of $665.8 million and gross profit of $108.0 million.
For 2007, Alon Brands reported its wholesale marketing segment purchased and resold 458.6 million gallons of branded motor fuel and generated revenues of $794.4 million and gross profit of $28.3 million. Three years later, the company reports wholesale marketing of 318.9 million gallons of branded motor fuel and generating revenues of $385.4 million and gross profit of $22.8 million.
Moving forward, the company states its growth strategies--similar to its original prospectus from three years ago--center on four core focuses: Optimizing its retail operations. Increasing sales of higher margin foodservice products. Enhancing its wholesale marketing operations. Growing its retail store base.
The SEC documents state that Alon Brands will use the proceeds raised by the IPO to accelerate the company's growth strategy, "including, without limitation, planned store remodels and the acquisition of additional retail locations," and for general corporate purposes.
Several details of the IPO remain to be worked out. The latest prospectus, like those filed before it, leaves out how many share of stock the company hopes to sell, what the open stock price will be and when the IPO will take place.
Alon Brands, a subsidiary of Alon USA Energy Inc., Houston, first filed documents for an IPO with the SEC in November 2008. It put the project on the back burner in early 2009 as the U.S. economy faltered, noting that it was waiting for the economic tides to turn before putting much of its value in investors' hands.
"Fundamentally, what we want to do is be ready," Alon USA president and CEO Jeff Morris said in February 2009. "I don't know when the market's going to open upbut whenever it is, we will be ready to open this up to the public."
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