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“The upside is that Roots owns their own brand,” he said. That gives them more control over pricing and marketing. “Retailers that own their own brand have a fighting chance in the future.”

The IPO, which raised $200 million, comes two years after the company agreed to sell a majority stake to New York-based private equity firm Searchlight Capital Partners.

Founders Shares

Founded in 1973 by Michael Budman and Don Green, Roots has more than 200 retail stores in Canada, the U.S., China and Taiwan, selling products that seek to capture the essence of the Canadian outdoors.

The 16.7 million shares offered in the IPO were sold by Searchlight and the founding shareholders, according to a company filing. The company will not receive any of the proceeds from the sale, it states.

The IPO was led by Toronto-Dominion Bank, Credit Suisse Group AG and Bank of Montreal. The banks have the option of purchasing additional shares that could bring the proceeds of the offering up to $230 million if exercised.

Following the IPO, Searchlight will control 48 per cent of the company while the founders will own about 12 per cent, according to the filing. If the over-allotment is exercised, that will fall to 43 per cent and 11 per cent respectively.

Bloomberg