Sprouts Major Stockholder Sells 15M Shares

Shares of Sprouts Farmers Market Inc. fell nearly 7 percent in trading on Wednesday after the company revealed the pricing of an underwritten public offering by major stockholder Apollo Global Management LLC and several other shareholders, which are selling off almost 15 million shares of common stock for $30 per share.

The decline in the Sprouts share price was apparently spurred by the investment community's prevailing concerns about whether too much stock was sold off and the fact that Sprouts Farmers Market won’t receive any proceeds from the offering.

Apollo is selling approximately 11 million of the total shares (13 million if the underwriters' option is exercised in full), proceeds of which will go to the selling shareholders in full when the offering is set to close on Aug. 18, pending customary closing conditions. The underwriting group, which is led by Goldman Sachs, Credit Suisse, Apollo Global Securities, Deutsche Bank, Guggenheim, UBS and Wolfe Research Securities, will have the option to purchase up to an additional 2.25 million shares of common stock from the selling stockholders, which will receive all of the proceeds from the offering.

Positioned as offering fresh, natural and organic foods at great prices, Phoenix-based Sprouts Farmers Market's offerings also include fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, baked goods, dairy products, frozen foods, natural body care and household items catering to consumers' growing interest in health and wellness. The company employs more than 17,000 associates and operates more than 180 stores in 10 states.