Roundy's Supermarkets Inc., the Milwaukee-based parent of Rainbow Foods and other grocery chains, said Monday that it hopes to raise $230 million through an initial public offering.
The company, which has been owned by private equity investors since 2002, has been the subject of repeated rumors that it was up for sale.
In a filing with securities regulators, Roundy's said the investor group led by Willis Stein of Chicago would continue to hold a controlling stake in the company after the IPO. The proceeds would be used to restructure debt, the filing said.
Roundy's employs 17,700 people and had sales of $3.7 billion in 2010. Most of its operations are in Wisconsin, though it owns 32 Rainbow stores in the Twin Cities and recently expanded into the Chicago area.
"They have been trying to sell the company and haven't had any luck," said John Dean, a Twin Cities grocery consultant.
Stein's group purchased the company for $750 million, and has expanded the chain from 60 to 158 stores, operating under the names Pick 'n Save and Metro Market in the Milwaukee area and Copps in Madison and northern Wisconsin.
Roundy's acquired the Rainbow stores in 2003, a year after the private equity group bought Roundy's. In its most recent expansion, it has opened four stores since July 2010 in the Chicago area under a new banner, Mariano's Fresh Market.
Supermarkets over the past decade have faced tougher competition from low-price supercenters at Wal-Mart and Target. That has caused net sales and market shares to slip.
