Boot Barn sets terms for 75 million IPO

Boot Barn Holdings, a western apparel and footwear retailer with 158 stores in the US, has announced terms for its Initial Public Offering (IPO) of shares earlier this week. The Californian brand is seeking to raise 75 million dollars by offering 5 million shares. Initial price tag for each share will come in at a range of 14

to 16 dollars.

At the midpoint of the proposed range, it would command a fully diluted market value of 398 million dollars (enterprise value of 502 million dollars), advanced the company in a communication issued on Monday.

Freeman Spogli to keep 71 percent of Boot Barn's common stock after IPO

The company plans to list on the New York Stock Exchange under the symbol BOOT, with current owner Freeman Spogli expected to own about 71 percent of Boot Barn’s common stock after the IPO.

On September, 29, Boot Barn Holdings Inc. filed its S-1 form with the US Securities and Exchange Commission (SEC) for an IPO. There were no terms given for this offering back then, but market estimated that it can potentially raise up to 86.25 million dollars.

“We estimate that we will receive net proceeds ... of approximately 66.9 million dollars,” said the company’s filing with the SEC. “We intend to use all of the net proceeds from this offering to repay a portion of our existing term loan facility, including applicable prepayment penalties and fees.”

To date, the boots retailer is privately owned and controlled by Freeman Spogli, a private equity firm which was also behind quick service Tex Mex chain El Pollo Loco (LOCO), which has gained 127 percent since its July IPO, highlighted ‘NASDAQ’.

Los Angeles-based private equity firm acquired its shares of Boot Barn in 2011 from Marwit Capital, a Newport Beach-based private equity firm, which acquired the retailer in 2007.

The underwriters for this event are listed as being J.P. Morgan, Wells Fargo, Piper Jaffray, Baird, and Jeffries.

Boot Barn operates 158 stores across 24 states, is most heavily concentrated in California (23 percent of stores), Texas (18 percent) and Arizona (9 percent). The retailer has grown both organically and through acquisitions, including its purchase of western and work-related retail chains RCC (29 stores) in 2012 and Baskins (30 stores) in 2013.

In a note with special interest for potential investors, the company has experienced 19 consecutive quarters of positive same store sales growth averaging 11.3 percent per quarter and 6.7 percent in the fiscal year ended March 29, 2014.

Financially speaking, revenue improved substantially, adding 28 percent to 82 million dollars for the thirteen weeks ended June 28, 2014, driven by its acquisition of 30 stores as well as partial sales from new openings and same store sales growth of 7.7 percent.

Adjusted EBITDA rose 32 percent to 8 million dollars during the quarter (9.4 percent margin).

Angela González Rodríguez