Party City Holdco Inc. has just issued the pricing for its initial public offering (IPO) in a regulatory filing. The filing is for 21.88 million shares to be priced at the midpoint offering price of $16. This does not include an overallotment option for an additional 3.28 million shares. The entire offering, including the option, is valued at $402.5 million. The company will file on the New York Stock Exchange under the symbol PRTY.

The underwriters for the offering are Goldman Sachs, Credit Suisse, Barclays, William Blair, Stephens, Deutsche Bank, Merrill Lynch, Morgan Stanley, J.P. Morgan and Telsey Advisory Group.

Party City is a party goods retailer in North America with approximately 900 locations. Through a series of acquisitions between 2005 and 2010, it built a retail operation that captures the full manufacturing-to-retail margin on a significant portion of the products sold in its stores.

The company made a few choice comments about itself in the filing:

We believe we are the largest global designer, manufacturer and distributor of decorated party supplies by revenue with products found in over 40,000 retail outlets worldwide, including our own stores as well as independent party supply stores, mass merchants, grocery retailers, dollar stores and others. Our category-defining retail concept, multi-channel reach, widely recognized brands, broad and deep product offering, and low-cost global sourcing model are, we believe, significant competitive advantages. We believe these characteristics position us for continued organic and acquisition-led growth and margin expansion.

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Founded in 1947, the company started as an importer and wholesaler and grew to offer a broad selection of decorated party supplies, including paper and plastic tableware, metallic and latex balloons, novelties, costumes and other garments, stationery and gifts for every day, themed and seasonal events. Party City’s products are available in over 100 countries with the United Kingdom, France, Germany and Australia among the largest end markets outside North America.

Revenue grew to $2.27 billion for the year ended in December 2014, from $1.60 billion for 2010, representing a compounded annual growth rate of 9.2%.

The company intends to use the net proceeds that it will receive from this offering to:

• Pay a $30.7 million termination fee, in the aggregate, to the sponsors pursuant to its management agreement with them, which will thereafter be terminated.
• Redeem all or a portion of the senior PIK toggle notes, which mature on August 15, 2019.

Following the offering there will be a total of 115.97 million shares of common stock outstanding, according to the filing. This would value the entire company at roughly $1.86 billion.

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Note that this company was taken private in 2005 by Berkshire Partners and Weston Presidio. The total consideration paid in the buyout was said to be roughly $364 million. Essentially, this current offering would value the company at five times what it was worth back in 2005.

FULL FILING

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