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PE HUB Wire Highlights, 10.26.18

Michael Jordan, Rubenstein’s Declaration Capital invest in aXiomatic; YETI IPO falls but Cortec still does well; Clearlake’s ConvergeOne explores sale

Happy Friday, Hubsters. What is everyone doing this weekend?

Earlier this week, I talked about how YETI could be one of the best PE deals. The IPO of the cooler company didn’t perform very well yesterday but for Cortec Group the deal is still pretty awesome. YETI ended up selling 16 million shares at $18, below its expected range of 20 million shares at $19 to 21. Underwriters had the option to buy another 2.4 million shares (the greenshoe). During its first day of trade, Yeti opened at $16.75, hit a high of $17.45, and closed at $17. This makes it a broken deal.

Cortec was expected to sell 13.3 million shares in the YETI IPO. The PE firm ended up offering roughly 12.5 million shares, which at $18 comes to $225.4 million (assuming the greenshoe is exercised). Cortec is retaining 43.8 million shares, or 52.4 percent. At $17 a share (YETI’s closing share price), the stake is valued at $744.6 million.

Cortec paid $67 million for two-thirds of YETI in 2012. It received $312.1 million from the one dividend YETI paid out in May 2016. The PE firm received $225.4 from the sale of shares, along with $744.6 million in paper gains and $312.1 million from the distribution for a total of $1.28 billion. Cortec looks as if it will make 19.1x. Still a pretty good return.

Deals: Where have you been, Michael Jordan? The NBA legend, an owner of the Charlotte Hornets, is joining David Rubenstein‘s Declaration Capital to invest in aXiomatic, the eSports startup. Press reports peg the round at $26 million. Jordan is investing through his family office. Read our brief here.

Clearlake
’s ConvergeOne Holdings is exploring a sale after it attracted takeover interest from private equity firms, Reuters reported..

Littlejohn & Co has put PlayPower Holdings Inc up for sale, Bloomberg said. The playground equipment maker could go for more than $800 million, the story said. Littlejohn acquired PlayPower from Apollo Investment Corp in 2015. Check out our brief here.

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