Nordic Capital spun off 30 percent of Thule Group AB last week in a highly successful initial public offering on Nasdaq Stockholm that valued the Swedish company at nearly half of what Nordic paid for it in 2007.
Nordic sold 26.1 million shares, or 26.1 percent of Thules 100 million authorized shares, on Nov. 26 to institutional investors globally and public investors in Sweden. The remaining 3.9 million shares were sold to the banks that underwrote the IPO, which was priced Nov. 26 at SEK70 ($9) per share, or on the high end of Nordics SEK64-74 price target. While Thule Group did not receive any proceeds from the sale, Nordic said the listing provides Thule access to Swedish and international capital markets to help finance future growth.
The IPO was coordinated by Goldman Sachs and Nordea with joint book runner Morgan Stanley and co-lead managers Danske Bank and DNB. In the United States, the shares were offered only to institutional and other qualified investors as defined in Rule 144A under the Securities Act.
Nordic acquired Thule for about $1.95 billion in 2007 from a private equity firm that had tripled the companys sales over the prior five years through acquisitions. When sales plummeted in the wake of the financial crisis, Nordic defaulted on covenants of certain loans and was forced to restructure in late 2008. It divested businesses that made hitch towing, integrated car roof rail and tow bar systems and closed plants all over the world. In early 2010, Nordic installed a new management team that has focused on establishing Thule as the most trusted brand for products consumers can use to carry their boards, boats, bikes, kids, skis and other gear. In 2011, Thule acquired Chariot Carriers Inc. for an undisclosed sum and in April of this year divested its $90 million-a-year European car trailer business.
In 2013, Thule earned 88 percent of its sales from its Outdoor & Bags segment, which earned 58 percent of its sales from Thule brand products, up from 35 percent in 2009. The balance came mostly from Case Logic, which makes cases and bags for electronic devices. The segment reported net sales of $SEK3.71 billion ($557 mm) in the first nine months of 2014, up 9.1 percent from the comparable period in 2013. Sales to the Americas reached SEK1.12 billion ($168 mm), or 32.8 percent of segment sales, up 1.6 percent from the year earlier period. Sales to Europe and the Rest of the World reached SEK2.28 billion ($342 mm) up 13.9 percent.
Thule estimates it controls 54 percent of the U.S. market for sport and cargo carriers, compared to 25 percent for Yakima and 4 percent for Saris. Globally it estimates its market share at 49 percent, compared to 9 percent for Yakima, 5 percent for Mont Blanc of Sweden and 4 percent for Atera of Germany.
For the nine months ended Sept. 30, 2014, gross margin in the Outdoor & Bags segment reached 40.2 percent, up 170 basis points from the nine months ended. Sept. 30, 2013. EBITDA margin increased 240 basis points to 21.8 percent. Operating income reached SEK619 million, up 28 percent from the year earlier period. Net income, however, plunged to SEK69 million (-$10 mm) due to a SEK368 million loss from discontinued car trailer and towing operations sold earlier this year.
Thules Specialty segment, which sells snow chains and pick-up truck tool boxes, generated sales of SEK321 million during the nine months ended Sept. 30.
