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Mexico's Tiendas 3B Raises $589 Million Through NYSE IPO

Tiendas 3B's listing on the NYSE is a top 10 largest American listing out of Mexico behind such listings as America Movil's (NYSE: AMX) $10.8 billion listing in 2000, Grupo Aeromexico's (NYSE: VX) $2.5 billion listing in 2013, and FEMSA's (NYSE: FMX) $2.2 billion listing in 1985 [figures adjusted for inflation]. Mexico's dry spell of listings since 2018 has recently been broken due to its very good fortune of being located next to the largest economy in the world presently decoupling from its main manufacturer and economic competitor, China. Most of Mexico's nearshoring boom activity is from Chinese manufacturers and not from American manufacturers choosing to establish large operations in Mexico as we've previously written.

Tiendas 3B is a leader in Mexico's hard discount sector, and the 3B brand stands for "Bueno, Bonito y Barato" or in English "Good, Pretty and Cheap". The ticker on the NYSE will be TBBB.

The February 7, 2024, listing for Tiendas 3B raised around $589 million through its initial public offering ("IPO"). Around 33.6 million shares were sold in the offering and the market cap a few days after listing hovered around $2.2 billion. The use of proceeds will be to continue expanding, pay off expensive Mexican debt, and continue digitizing the operations. The share price increased 8% on the first day of trading indicating a positive response from the market. Reports are that approximately half of the shares outstanding were listed in the IPO.

Tiendas 3B is the second-largest retail grocer in Mexico behind only Walmart de Mexico with approximately a 17% market share. Its revenues in 2022 were around $12 billion (i.e., MXN $242.3 billion) which it generated through its 2,200 stores operating in all 32 states in Mexico. It plans to add 300 stores in 2024 mostly in smaller towns and traditionally underserved areas. Its typical store size is less than 400 square meters (i.e., 4,500 square feet) and it offers a limited selection of essential and mostly white label products. If Dollar Tree and Aldi had a baby a Tiendas 3B would pop out.

An early backer of Tiendas 3B was Quilvest Capital Partners, a private equity fund owned and backed by the Bemberg family. The Bemberg family is a prominent Argentine family with businesses dating back to the late 19th century. They are known for their involvement in the beer industry and founded the iconic Argentine brewery Quilmes in 1888. Their private equity fund was launched in 1972 with $8 billion and focuses primarily on mid-market buyouts and growth capital in Europe and North America.

Emerging Real Estate Digest recently discussed that MTY Fibra would be raising capital in America, but not through a listing. Listings for REITs abroad are complicated due to them being driven by local regulatory and taxation frameworks. Prior to the recent listings out of Mexico there hadn't been one in America since 2018.




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