Towerbrook Capital Partners is ready to monetize part of affiliate J Jill, a women's apparel retailer. Towerbrook bought the company in May 2015. A year later Towerbrook pulled $70 million in dividends from J Jill (source: SEC S-1). It now wants to sell nearly 12 million shares for $215 million (source: Nasdaq). J Jill will pay the $6.1 million in IPO fees while Towerbrook gets the proceeds. It's the PEU way.
Seeking Alpha wrote about the IPO and J Jill's history:
J. Jill used to be a public company until 2006 when Talbots bought them for $517 million. Then in 2009 Golden Gate Capital acquired them for $75 million. And finally, TowerBrook acquired them in 2015 for approximately $400 million.Talbots won J Jill in 2006 over more than a dozen potentially interested buyers. Companies sold for a premium price in 2006-2007. Then came the fall 2008 financial crisis and J Jill went cheap to its first private equity underwriter. Golden Gate Capital charged J Jill $1 million per year in Sponsor's fees.
A look back at J Jill's 2006 SEC filing showed Liz Claiborne pursuing the company. J Jill hired Peter J. Solomon Company as financial advisor for the merger process. Solomon showed a range of valuations for retailers like J Jill.
As a multiple of net sales, the value could be: 0.9x – 1.4x
SeekingAlpha's recent piece stated:
"Clearly their bankers must have told them they can get their equity at 1.2-1.3X sales, which is a generous price in my opinion"Does that mean we're back to a frothy IPO market fueled by private equity underwriters wanting to monetize affiliates and others determined to mobilize huge amounts of dry powder?
Consider this comment from December 2015:
“Right now we are back to where we were in 2006. It feels pretty frothy.”Fourteen months later would take us to spring 2008 when Carlyle Capital Corporation and Bear Stearn's imploded. Nothing like that appears to be on the horizon. Or does it?
