PORTLAND, Ore. - A strong debut by Dollar General in its first day of trading may signal a warmer reception for public offerings, a market that nearly froze last year and has had a fitful recovery.
Discount retailer Dollar General offered 34.1 million shares priced at $21, raising $716.1 million. Investors clamored for the stock, sending shares up $1.73, or 8.2 percent, to $22.73 yesterday.
The strong start was good news for its owner, investment firm Kohlberg Kravis Roberts, and other private equity owners who might be looking to unload portfolio companies and deliver some gains for their investors.
Dollar General was public until 2007, when it was purchased for $6.9 billion by an investment group that included KKR, Goldman Sachs, and others. The company’s closing stock price yesterday implies a value of $7.7 billion.
“I believe this was a litmus test of sorts for the private equity companies,’’ said David Menlow, the president of IPOfinancial.com. “If we continued to have private equity sponsored deals come into the marketplace and not work . . . it was going to taint the waters for others that were certainly on their way.’’
