Party City on Jan 22 filed to raise up to $500 million in an initial public offering, according to an SEC filing. The party goods retailer did not disclose how many shares it would sell or offer any guidance on their price. That will come in a future filing.
THL has already made back some of its investment. Last year, parent company PC NextCo Holdings and its PC Nextco Finance unit issued $350 million in senior PIK toggle notes, and used the proceeds to fund a $338 million dividend to shareholders, according to SEC filings.
THL, which owns 69.44 percent of Party City, appears to have received about $235 million from the dividend – about 40 percent of its equity contribution. Advent, which has a nearly 24 percent stake in the company, looks to have received an $81 million distribution.
Elmsford, N.Y.-based Party City is the largest U.S. retailer of party goods. The company produced $1.9 billion in revenue for the 12-months ended Sept. 30.
However, the company is heavily leveraged with about $2.4 billion in total debt as of Sept. 30, the SEC filing said. That’s more than double the $982 million in outstanding debt that Party City held as of Dec. 31, 2011, according to an S-1 filing dated May 10, 2012.
Party City said its “substantial indebtedness and lease obligations could adversely affect” its financial flexibility and competitive position.
The IPO is Party City’s latest attempt to go public. In 2011, the company filed for an IPO, seeking to raise $350 million. But it withdrew the offering in 2012, when it clinched its $2.7 billion sale to THL.
The IPO also comes as THL is premarketing for its next buyout fund, a placement source said. The firm is seeking $3 billion for its next PE pool, Bloomberg News reported in December.
THL closed its sixth buyout fund in 2007 at $8.1 billion, plus another $2 billion for co-investment vehicles. Thomas H. Lee Equity Partners VI LP is generating a 4.8 percent net IRR as of June 30, according to the California Public Employees Retirement System, or CalPERS.
Officials for THL could not immediately be reached for comment.
Luisa Beltran is a senior reporter for peHUB