Mexico’s BBB Foods chain of hard discount grocery stores prides itself on offering quality products at a good price. In February 2024, it did the same with Wall Street, concluding one of the largest new listings from Mexico in years.
The company, commonly known in Mexico as Tiendas 3B, launched its initial public offering on February 9, raising $677 million, which included $589 million from Class A common shares and $88 million in an anchor demand from Capital International, an investment management group.
The deal was the most upsized IPO since Oddity Tech, a U.S. consumer tech company, in July 2023, according to Bank of America.
Appetite was strong for the stock, which allowed the company to upsize the deal by 20%, selling 33.7 million shares at $17.50 per share, a price 21% above the bottom of the initial range. It was the best performing SEC-registered IPO by a foreign issuer in 2024. By December 31 the stock price had hit $28.28.
The success of the IPO “showed investor interest for Mexican companies breaking a long spell for SEC-registered IPOs by a Mexican-based company and IPOs in general. In addition, the IPO culminates a successful entrepreneurship story for the Tiendas 3B team,” says Gabriel del Valle, a partner at the Ritch Mueller law firm, which represented five different banks in the IPO.
Proceeds from the listing were used to pay down debt and fund projects, which is evidenced in the continued growth throughout 2024. The company opened 346 new stores in the third three quarters of 2024, bringing to 2,634 stores in Mexico. Same store sales grew by 11.6% in the third quarter, outpacing the overall growth of the grocery and convenience store segment.
According to the company’s third quarter filing, revenue was up nearly 30% and the EBITDA by 54% in year-on-year. Part of the gain came the 19% depreciation of the Mexican peso, which the company stated was positively impacted by its new U.S. dollar cash position from the IPO proceeds.
Tiendas 3B celebrates its 20th anniversary in the market in 2025 with an aggressive growth strategy, planning to open even more stores than the past year. The long-term goal is to operate 20,000 stores. The grocery sector in Mexico moves around $125 billion annually. Tiendas 3B is the fifth largest chain be revenue, and second in terms of number of stores, in the country.
The three Bs in the name stand for bueno, bonito and barato in Spanish, or “good, nice and affordable” in English.
Joint Bookrunners: BofA Securities; JP Morgan; Morgan Stanley; Scotiabank; UBS
Issuer’s Legal Counsel: Greenberg Traurig; Simpson Thacher; Conyers Dill & Pearman
Counsel to Joint Bookrunners: Cleary Gottlieb; Ritch Mueller
Issuer’s Auditor: PWC
Issuer’s Accounting Advisor: EY
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