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Aritzia raises 400 million Canadian dollars in largest IPO in Canada this year

By Angela Gonzalez-Rodriguez

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Business

The Canadian womenswear chain has taken the market by storm after it raised 400 million Canadian dollars (around 302 million dollars) in its initial public offering of shares (IPO) on Tuesday.

Market insiders have stressed the epic of this milestone, as the amount raised marks the largest deal during one of the miserable years in Canada for IPOs.

According to Reuters, the company - as well as shareholder Berkshire Partners and founder Brian Hill - sold 25 million subordinate voting shares for 16 Canadian dollars each. As indicated in the company sales documents, the final price tag came in at the high end of the 14 to 16 Canadian dollars marketed range.

The price values the Vancouver-based retailer at 1.87 billion Canadian dollars, based on 117.1 million shares outstanding as cited in documents.

Aritzia's final prospectus filing late Monday indicates that at least 25 million of the shares will be sold through the IPO and the underwriters have the option for a further 15 percent -- up to 3.75 million shares -- at the same price within 30 days, published Reuters.

As reported by BNN Canada, which quoted sources familiar with the matter, the IPO was ten times oversubscribed, even though the retailer is offering subordinate-voting shares.

Aritzia’s main stakeholders will hold 97 percent control of the company

Aritzia’s two main shareholders, Boston-based Berkshire Partners and Artizia founder Brian Hill, will retain about 97 percent of the company´s control through multiple-vote shares, which aren’t part of the IPO.

The fashion retailer´s management defended the dual-class share structure, saying that it would help prevent a hostile takeover that could derail the company’s growth plans, sources told BNN.

“We’ve gone through this, the most famous case is Magna back some years ago with Frank Stronach,” said Gordon Reid, president and CEO of Goodreid Investment Counsel, when asked about Aritzia’s IPO in an interview with the Canadian news channel.

I would like to move on from this, but obviously our securities legislation hasn’t advanced to a point where we are, Gordon further added.

The Vancouver-based fashion retailer has a network of 75 stores and an online business.

The IPO is expected to close October 3. The shares will trade on the Toronto Stock Exchange under the symbol ATZ.

The company plans to open 25 to 30 new stores by 2021, including 10 over the next two years.

The retailer’s offering comes at a “tough” time in the IPO market, said Goodreid Investment Counsel’s Reid. “I would caution that in a market of short supply, there might be undue demand for something like Aritzia,” Reid told BNN.

Photo Credits: Aritzia web

Aritzia