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Bain Capital to make 4.25x its money on Burlington Stores

More than seven years after buying Burlington Stores, Bain Capital stands to more than quadruple its investment in the discount retailer.

Burlington went public Wednesday after pricing 13.3 million shares at $17 each, above its $14 to $16 price range. Burlington’s stock surged more than 40% on the New York Stock Exchange to trade at $24.19 a share.

In April 2006, Bain Capital completed its buy of Burlington Coat Factory Warehouse Corp in a deal valued at $2.1 billion. The Boston buyout shop invested $445 million of equity as part of the deal, according to SEC filings from that time. The investment came from Bain Capital Fund IX LP, which collected $10 billion in 2006, regulatory filings said.

Burlington, which sells off-price suits, shoes and coats, has paid out three dividends in the past few years, according to SEC filings. The company issued a $297.9 million cash dividend in fiscal 2011. Burlington paid out another $1.7 million in 2012, followed by a $336 million special cash dividend in February. Of the $635.6 million in dividends paid by Burlington, Bain received roughly $591 million, which is more than it invested.

The private equity firm is not selling shares in the offering. Before the IPO, Bain owned 54.39 million shares, or 93.3 percent. Bain’s holding will fall to 73.7% after the IPO, SEC filings said.

At $24.19 a share, Bain’s stake is worth about $1.3 billion. Bain stands to make 4.25 times its money, which includes the $591 million in dividends and paper gains.

Officials for Bain declined comment. Burlington could not be reached for comment.

Photo courtesy of Burlington