Cortec could pocket $280 mln if YETI’s IPO roars

YETI Holdings, which sells bear-proof high-end coolers, could raise $400 million in its second attempt at an initial public offering.

YETI on Oct. 15 set the terms for its pending IPO at 20 million shares at $19 to $21 each, according to an SEC filing. The company itself is selling 2.5 million shares, while stockholders are offering 17.5 million.

Underwriters on the deal have the option to buy another 3 million shares at the public-offering price (the so-called greenshoe).

The IPO filing comes just seven months since YETI tabled its first effort to go public. The Austin company had filed to go public back in 2016 but canceled the offering in March of this year, citing market conditions. It then refiled in late September, seeking $100 million.

Fishermen Roy and Ryan Seiders founded YETI in 2006. The brothers wanted a cooler they could stand on without fear of collapse as they fly-fished, Inc magazine reported.

YETI’s high-priced outdoor equipment, which includes coolers, chairs and drinkware, is geared for hunters, outdoor adventurers and fishermen. A Tundra 350, which can hold 259 cans, sells for $1,299.99, while a Rambler one-gallon jug goes for $129.99.

The Interagency Grizzly Bear Committee has certified YETI’s Tundra coolers as “bear resistant,” the regulatory filing said.

The company reported $341.5 million in sales for the six months ended July 30, a 34 percent increase from $254.1 million for the six months ended July 1, 2017. Net income was $15.5 million for the six months vs. $156,000 as of July 1, 2017.

YETI, which calls itself an emerging growth company, is backed by Cortec Group.

The middle-market PE firm acquired YETI Coolers in 2012. Cortec paid $67 million for two-thirds of the company, the Wall Street Journal reported.

At the proposed offer price of $21 a share, Cortec’s 56.3 million shares would be valued at nearly $1.2 billion.

Private equity firms typically do not sell shares in portfolio companies during an IPO.

Cortec is not following this strategy. The PE firm is offering 13.3 million of its shares as part of the offering, for proceeds of about $280 million. Following the IPO, Cortec will see its holdings drop to 48.7 percent of YETI from about 69.4 percent, assuming the greenshoe is exercised.

Co-Founder Roy Seiders owns roughly 9.1 million shares, or 11.2 percent, before the IPO. He is selling 710,339 shares, reducing his stake to about 8.3 million shares, or 9.8 percent after the greenshoe.

Ryan Seiders also plans to sell into the IPO. He wants to sell about 1.6 million shares, which will cut his stake to about 7 million shares, or 8.4 percent.

YETI and Cortec could not be reached for comment.

Action Item: Contact YETI CEO Matthew Reintjes at +1 512-394-9384