(Bloomberg) -- BBB Foods Inc., the operator of a discount retailer in Mexico, is looking to go public with a US initial offering that’s expected to raise as much as $500 million, according to people familiar with the matter. 

The company, a holding firm that conducts business through its main subsidiary Tiendas 3B, is seeking a listing that would imply a valuation of at least $1 billion, the people said, asking not to be named discussing confidential information. The transaction could be launched as soon as the first quarter, the people said.

Tiendas 3B didn’t immediately reply to a request for comment. 

Latin America’s second-largest economy has seen a modest revival of secondary equity offerings in recent months after suffering through a drought of new company listings over the last six years. In 2023, companies tied to a factory boom, such as industrial property firms and trucking and logistics company Grupo Traxion, issued $1.2 billion, tripling the amount raised in 2022. 

Read More: Investment Bankers Are Starting to See Mexico as a Money Spinner

Tiendas 3B would be the first consumer-oriented Mexican company to raise funds since Becle, the maker of Jose Cuervo tequila, listed in 2016. The offering will give investors a new vehicle to play the strength of Mexico’s consumers, who have been bolstered by increases to the minimum wage, the president’s cash aid programs and record remittances.

The company was founded by Anthony Hatoum, a Lebanese-American businessman who moved to Mexico about two decades ago to start the discount retailer. Following the business model of German discount chain Aldi, 3B stocks a limited variety of products ranging from snacks and pet food to cleaning products and diapers at competitive costs. The 3B stands for “bueno, bonito y barato,” or “good, nice and affordable.”  

The discount retailer, which operates over 2,200 stores across about a dozen states in the country, is working with JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp., Scotiabank and UBS Investment Bank on a potential listing, according to a preliminary prospectus filed last week.  

The company’s Ebitda totaled $75.1 million for the nine-month period ended on Sept. 30, according to the prospectus, above its 2022 total of $74.1 million. 

“We have barely scratched the surface of the $124 billion-dollar Mexican grocery market,” Hatoum wrote in the prospectus. 

The company is awaiting approval from Mexico’s stock regulator before it can move on the US listing, one of the people said. 

Tiendas 3B is not alone among issuers eyeing Mexico’s equity market comeback. Industrial property trust Fibra Next is also planning to launch an initial public offering in early 2024 after a lack of final tax paperwork caused it to pull the offer in November.  

 

--With assistance from Ilan Brik.

(Updates second paragraph to clarify the valuation the company is seeking)

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