Topic: How To Invest

Spinoffs, Takeovers & Special Situations Hotline – Friday, October 27, 2017

Article Excerpt

ROOTS CORP., $9.73, symbol ROOT on Toronto, is a Canadian clothing retailer focused on fashion sweats and other casual clothing. It also makes leather goods, including handbags, jackets and shoes. The chain has 116 stores in Canada, four in the U.S., and 136 others across Taiwan and China. Those Asian outlets are operated by a partner. This week, the company completed an initial public offering (IPO) on the Toronto exchange. It sold 16.7 million common shares at $12.00 a share. However, that price was below the expected range of $14.00 to $16.00 a share. None of the $200 million in proceeds went to the company, but rather to major-shareholder Searchlight Capital and founders Don Green and Michael Budman, along with certain members of their families. Private-equity firm Searchlight Capital Partners acquired 80% of the company in 2015 from Green and Budman. The pair started the chain of clothing stores with one location in 1973. Following the IPO, Searchlight now owns 47.7% of Roots. The…