The Philadelphia discount retailer announced a secondary offering of 7 million shares Tuesday. Most of the stock is coming from Advent, which is selling about 5.6 million shares, according to a Jan. 15 regulatory filing. At $31.48, the proposed maximum offering price, Advent could realize about $176.3 million from the sale.
The secondary sale will reduce Advent’s stake in Five Below to about 21.3 million shares, or 39.4%, from 26.8 million or 49.7%. LLR Capital is also selling a small chunk, about 400,000 shares. LLR’s stake will fall to 6.9% from 7.6%.
Five Below, which sells “extreme value merchandise” like soccer balls or sandals for $5 or less, went public in July at $17 a share. The offering surged nealry 56% its first day.
On Wednesday, the retailer’s stock gained $2.57, or 8.07%, to $34.40 in afternoon trading.
Advent acquired a majority stake in Five Below in October 2010. The PE firm invested $192.9 million of equity in the deal, while the Sargent Family put in $1.1 million, regulatory filings say.
Advent has already received back more than half of the money it provided. In May, Five Below paid out a “special dividend” of about $99.5 million, SEC filings say. LLR received $9.5 million, while Advent got about $62.2 million, peHUB has reported. (Five Below paid out another “special dividend” in 2010 of $196.7 million, but Advent wasn’t a shareholder at the time).
Advent also unloaded a small piece, about 2.84 million shares, in the Five Below IPO. At the time, it stood to make $47.6 million from the sale (at $17 each).
In all, Advent could realize $286.1 million from the dividend and stock sales. The firm’s remaining stake in Five Below, of 21.3 million shares, is valued at roughly $732.7 million. Including realized and unrealized gains, Advent could make 5.3x the money it invested.
Photo courtesy of ShutterstockGet your FREE trial or subscribe now to Buyouts to find new deal opportunities, super-charge your fundraising efforts and track top managers.