The actions of BJ Wholesale Club shine back on the public market

(Reuters) – The shares of BJ's Wholesale Club Holdings ( BJ.N ) jumped 26.5% on their stock debut on Thursday, giving the company a boost $ 2.72 billion.

The wholesaler sold 37.5 million shares as part of its IPO, which allowed him to raise a net proceeds of $ 637.5 million that he account mainly use to repay his debt.

The shares of the company opened at $ 21.25, on its price of $ 17 per share.

The BJ's Wholesale Club, which has 215 warehouses spread across 16 states, is highly competitive with Costco Wholesale ( COST.O ) and Sam's Club, a subsidiary of Walmart Inc. ( WMT.N )).

The company was taken over privately by the equity companies Leonard Green & Partners LP and CVC Capital in 2011 for $ 2.8 billion.

Currently, CVC and Green Equity each hold 34.5% of the company's capital.

The Westborough, Mbad., Headquarters, recorded net sales of $ 12.50 billion for fiscal 2018, up 3.3% from fiscal 2017. Total net income stands at $ 50.3 million.

The IPO of BJ will be the second in 2018 after Hudson Ltd ( HUD.N ) and comes at a time when grocer and mortar retailers are struggling as consumers spend more of their dollars online.

However, warehouse club operators have largely weathered the downturn, as their business models are based more on recurring revenues than on direct sales.

The wholesale club of BJ stated that it had more than five million paying members, as of February 3. In comparison, Costco had nearly 51 million members as of May 13, 2018, according to a bit.ly/2KdyvDc and Exchange Commission repository.

Bank of America, Deutsche Bank, Goldman Sachs and JP Morgan are leading a syndicate underwriting 14 companies for the retailer's IPO.