The Supply Side: Wal-Mart and retail supplier briefs

• Pinnacle Foods IPO priced
Pinnacle Foods Group, a grocery giant in terms of its iconic brands, went public on Wednesday evening (March 27).

Private equity owner Blackstone Group issued 29 million shares at $20 per share, the high end of of the expected range between $18 and $20, according CNBC’s Jim Cramer.

Pinnacle Foods is valued at about $2.3 billion at the IPO price and the stock is expected to start trading on the New York Stock Exchange under the symbol "PF" on Thursday.

Pinnacle expects proceeds of about $521 million from the IPO after expenses. Cramer says most of the cash will be used to repay $465 million in debt. The company will carry about $2 billion in debt after the IPO is funded – most of that stems from the acquisition of Birds Eye in 2009.

Blackstone paid about $1.3 billion in cash for Pinnacle in February of 2007 and assumed $900 million in debt. The investment firm is not selling shares in the IPO and will still own about 70% of Pinnacle after the deal is done.

Pinnacle brands include: Duncan Hines, Log Cabin, Hungry Man, Vlasic and Aunt Jemima to name a few. The company boasts its food products can be found in 85% of American homes.

Cramer and other Wall Street analysts say the food company has plenty of upward potential if it’s prices on the $18 to $20 on the offer. Given the company’s recent earnings track record and future potential Cramer set a fair target price of $30 a share.

The company also intends to pay an 18-cent per share dividend, which would yield just under 3.8% at the IPO price of $20.

Pinnacle Foods has a processing facility in Fayetteville and a sales office in Bentonville and is a major supplier to Wal-Mart Stores Inc.

• Grocery job losses
Less than a week after grocery giant Supervalu closed a deal to sell Albertsons, Jewell, Acme and Shaws/Star stores the company announced plans to reduce its national workforce by an estimated 1,100 positions.

“The decision to reduce our workforce, although difficult because of the impacts to our people, is the necessary next step in the rebuilding of our business,” said CEO Sam Duncan.

He said the move is an important part of company strategy to be more focused and efficient in its operations, including how the remaining three business units will be staffed.

Supervalue also sold Sav-on and Osco in-store pharmacies in the deal to AB Acquisition LLC, an affiliate of a Cerberus Capital Management LP-led investor consortium, in a stock deal valued at $3.3 billion.

The smaller Supervalue says it needs fewer corporate and store support personnel since the sale. The three remaining business units are expected to generate more than $17 billion in revenues annually for Supervalue.

Supervalue is a major grocery competitor to Wal-Mart Stores Inc. in some markets.

• Family Dollar adds merchandiser position
Family Dollar Stores this week named Scott Zucker to the newly created position of senior vice president of merchandise operations.

Zucker will be responsible for driving the strategy and execution of merchandise initiatives, category management, merchandise planning and replenishment.

The appointment was welcomed on Wall Street. "We believe that (Zucker's) experience in pricing and merchandise operations could prove valuable as the company works to better manage the impact of its merchandising initiatives on mix and markdowns," wrote Citi Research analyst Deborah Weinswig in a note published Monday morning (March 25).

"This new alignment will allow for improved execution, simplified operational processes, inventory optimization and faster strategic decision-making," said Michael Bloom, Family Dollar president and chief operating officer. "Scott brings a wealth of leadership and experience in merchandising, supply chain planning and information technology, all of which will provide tremendous support of our long-term strategic goals."

Zucker will report to Bloom.

He joined Family Dollar in 2006 as divisional vice president of pricing. Most recently, he served as vice president of  IT solutions.