Lululemon Sets IPO Terms

NEW YORK (AP) – Canadian yoga and fitness apparel company Lululemon Athletica Inc. expects an initial public offering of 18.2 million shares by the company and its stockholders to raise about $200.2 million, according to a regulatory filing Tuesday with the Securities and Exchange Commission.

A group of stockholders, including private equity investors Advent International Corp. and Highland Capital Partners, are offering 15.9 million shares in the offering. The remaining 2.3 million shares will be sold by the company.

Lululemon, which is concurrently offering its common stock in Canada, expects the offering to price between $10 and $12 per share.

The company expects to receive about $18.2 million in net proceeds from its portion of the offering. The anticipated proceeds exclude underwriting discounts and offering expenses and assume an offering price of $11, the midpoint of the anticipated range.

Lululemon plans to use the net proceeds, together with cash flow from operations, to fund new store openings and working capital. The company said it budgeted a total of $28 million to $34 million for new store openings in fiscal 2007 and fiscal 2008, although the actual amounts may differ.

Lululemon expects to have 75.3 million shares outstanding after the offering.

The Vancouver-based company principally sells its branded apparel, which is designed for yoga, dance, running and general fitness, through its 57 stores in Canada and the U.S.

For the first quarter of 2007, Lululemon reported earnings of $3.5 million on sales of $44.8 million.

Goldman Sachs, Merrill Lynch, Credit Suisse Securities, UBS Securities, William Blair, CIBC World Markets, Wachovia Capital Markets and Thomas Weisel Partners are listed as underwriters for the offering.

The underwriters have been given the option to buy up to 2.7 million additional shares from the selling stockholders to cover over-allotments.

The company expects to list its shares on the Nasdaq Stock Market under the symbol “LULU” and on the Toronto Stock Exchange under the symbol “LLL.”