The initial public offering market finally showed some signs of life last year after being practically nonexistent for most of 2016. On Wednesday night alone five deals priced, but the one that caught Jim Cramer's attention was US Foods Holding Corp, the second biggest IPO of 2016.

"This IPO renaissance is good news for the stock market in general because it means that private companies are no longer terrified of the public markets," the "Mad Money" host said.

Additionally, the fact that large companies like US Foods are going public is an even better sign. US Foods is the No. 2 food distributor in the country, behind Sysco Corp, and serves some 250,000 locations, mostly restaurants and hospitality companies.

"In short, it's a real company with real sales and real earnings, not some fly-by-night speculative biotech that might not make any money for years," Cramer said.

When the company went public, the market initially gobbled it up, pricing at $23 a share and then instantly rising by 8 percent at the end of the day.

However, just because the IPO made some investors money doesn't mean that the company is a worthwhile investment. To figure that out, Cramer turned to the books and did his homework.

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US Foods is one of only two foodservice distributors with a national footprint, with the other being Sysco. Additionally, the food distribution industry does have slow and steady secular growth as the money that consumers spend on dining out has been rising for decades.

While US Foods has been around for 150 years, Cramer traced its last iteration back to 2007 when the old US Foodservice was acquired by private-equity firms. They spent the next few years making large structural changes, and, toward the end of 2011, it rebranded itself from US Foodservice to US Foods; then in 2013 tried to sell itself to Sysco. That deal was ultimately shot down by the antitrust regulators.

"But, and this is a big but, US Foods is a private-equity backed IPO, a classic leveraged buyout story that has been flipped to the public markets, and these tend to carry their own particular set of risks," Cramer said.

For instance, Cramer was concerned about US Foods' ugly balance sheet, which has more than $5 billion in loans on its books, including a significant amount of variable interest rate debt. This is versus just $142 million in cash that it had two months ago.

That means if it wants to continue making acquisitions and it doesn't want to wreck the balance sheet, it has to use its own stock as currency, which could dilute existing shareholders.

Additionally, US Foods' two private equity backers, KKR and CD&R, still own a 75.6 percent combined stake in the company. Cramer worried that they could ring the register and put pressure on the share price.

"While US Foods has a decent story, there are just too many red flags here for me to consider the stock as a smart investment. It's possible the company's cost cutting efforts will bear fruit and bolster the earnings … but for now I think it's too soon to tell," Cramer said.

A safer way to play the industry would be through its competitor, Sysco, Cramer said, which has the endorsement of Nelson Peltz, who Cramer considers as the only major activist investor worth piggybacking.

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