Gander Mountain came out strong in its Initial Public Offering last week, posting a share price increase of nearly 51% for the week to close at $24.10 on Friday. The IPO was priced at $16 on Wednesday and raised $91.6 million before fees and will clear $85.1 million after expenses.
The recent strength in sporting goods stocks had a noticeable impact on the attractiveness of this IPO.
Dicks Sporting Goods, the last retailer in the sector to go public, has seen its stock skyrocket more than 385% since its IPO in September 2002 and is up nearly 19% year-to-date after a 2 for 1 split. Hibbett Sporting Goods is up 28.6% for the year after a 3 for 2 stock split last week. The Sports Authority share are up roughly 3.0% for the year while Galyans shares are down nearly 18% since January 1.
Ganders key competitors, Cabelas and Bass Pro, are also in the hunt. Cabelas has already filed its registration statement to go public and Bass Pro is expected by many to file in the next year as well.
Gander Mountain increased the size of the offering by 750,000 shares and priced it at the top of its expected $14 to $16 range – both signs of strong demand.
GMTN is expected to use a large part of the IPO proceeds to repay $58.5 million on its credit line and $9.8 million to parent Holiday Companies, which together with the founding Erickson family, owns more than half of Gander Mountain's shares.
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