Companies and Brands
Funko Announces Potential Pricing for IPO
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Funko has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering. The company expects to price its 13.33 million shares in the range of $14 to $16 per share, with an overallotment option for an additional 2.00 million shares. At the maximum price, the entire offering is valued up to $245.33 million. The company expects to list its shares on the Nasdaq under the symbol FNKO.
The underwriters for the offering are Goldman Sachs, JPMorgan, Merrill Lynch, Piper Jaffray, Jefferies, Stifel, BMO Capital Markets and SunTrust Robinson Humphrey.
This is a leading pop culture consumer products company. Its business is built on the principle that almost everyone is a fan of something and the evolution of pop culture is leading to increasing opportunities for fan loyalty. Funko creates whimsical, fun and unique products that enable fans to express their affinity for their favorite “something” — whether it is a movie, TV show, video game, musician or sports team.
The company has strong licensing relationships with many established content providers, such as Disney, HBO, LucasFilm, Marvel, the National Football League and Warner Brothers. Funko currently has licensed over 1,000 properties, which management believes represents one of the largest portfolios in the industry.
Current retail customers include Amazon, Barnes & Noble, Entertainment Earth, GameStop, Hot Topic, Target and Walmart in the United States, and Smyths Toys and Tesco internationally. In 2016, the company sold its products through over 2,000 U.S. retailers, who collectively have over 25,000 total doors, and through distributors internationally, which represented 18.8% of 2016 net sales.
Funko briefly described its finances as follows:
From 2014 to 2016, we expanded our net sales, net income and Adjusted EBITDA at a 100%, a 17% and an 86% compound annual growth rate, or CAGR, respectively. We achieved this growth without reliance on a singular “hit” property as no single property accounted for more than 15% of annual net sales during that period. We believe our strong growth and profitability reflect our pop culture consumer products leadership.
The company intends to use the net proceeds from this offering to repay its debt, with the remainder being put toward working capital and general corporate purposes.
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