Private equity has been looking for its next lululemon and it may have found it with CorePower Yoga.
Denver-based CorePower, which has 74 studios spread through nine states, is looking for an investor, several PE sources say. Greene Holcomb & Fisher is advising on what is being billed as a “strategic recap,” according to sources.
CorePower offers yoga classes like “Hot Power Fusion” and “CorePower,” and certified teacher training, as well as yoga clothing and accessories. The company produced $60 million in revenue and $10 million EBITDA in 2012, the sources say. CorePower is “very high growth” and is looking to sell at 15x, or $150 million, the sources say.
Trevor Tice, who founded CorePower in 2002, is expected to roll forward at least 25% of his stake into the deal, while institutional investors are expected to do the same, according to the sources.
The auction is believed to be in the early stages. One source said it has already attracted interest from PE shops. ”Everyone is foaming at the mouth for this one,” he said.
CorePower is expected to draw interest from PE firms such as Freeman Spogli & Co., Brentwood Associates, Goode Partners, Catterton Partners and Angelo Gordon, a PE exec says. However, a second source says the high multiple being sought makes it “unlikely they get that from a PE guy.”
Another PE exec speculated that CorePower could sell for 10x to 12x.
Tice, CorePower’s CEO, started the company when a climbing accident left him with six permanent screws in his ankle. He turned to yoga when he could no longer engage in recreational sports like running and climbing, according to the CorePower website. Tice is the former owner of TechPartners International, which he sold in 2001.
Amzak Capital Management, the investment vehicle for the Kazma family, reinvested in CorePower in June 2010. At the time, the company had 31 studios in five states. It’s unclear when Amzak initially invested and how much it currently owns of CorePower.
Yoga apparel maker Lululemon is considered one of the most successful private equity investments in retail/consumer. In December 2005, Advent International and Highland Capital Partners acquired a minority stake in Lululemon for $93 million. (Advent reportedly paid $74.4 million.) Lululemon went public in 2007 and turned out to be one of the best performing IPOs of that year. Advent, which declined comment, is no longer an investor in the company.
“Everyone is looking for the next lululemon,” one banker says.
CorePower declined comment. Officials for Greene Holcomb and Amzak Capital did not return calls for comment.
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