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IPO Watch: Canada, Get Back To Your Roots


Iconic Canadian retailer Roots Corp. has filed for an initial public offering of its shares in Toronto.

Roots said Wednesday that it has filed a preliminary long-form prospectus with securities regulatory authorities for an initial public offering of its common shares. The preliminary paperwork does not indicate the number of shares that will be sold, or the price.

The company has applied for listing of its shares on the Toronto Stock Exchange under the ticker symbol "ROOT."

The decision by Roots to go public comes almost two years after the retailer agreed to sell a majority stake to New York-based private equity firm Searchlight Capital Partners.

The IPO is structured as a secondary offering of Roots' common shares by investment funds managed by Searchlight and an entity indirectly controlled by the founders of Roots, Michael Budman and Don Green. Roots will not receive any proceeds from the IPO.

The IPO is being co-led by TD Securities, Credit Suisse Securities and BMO Capital Markets, according to a regulatory filing.

Citing people familiar with the matter, Bloomberg reported that Roots is seeking to raise about C$200 million from the IPO and could have a market value of about C$700 million after listing.

Roots was founded in 1973 by Budman and Green, with one small store in Toronto. The company now operates more than 250 retail stores in Canada, the U.S., Taiwan and China, selling a portfolio of premium apparel, leather goods, accessories and footwear.

For fiscal 2016, Roots reported a profit of C$8.2 million that fell from C$16.5 million in the prior year, while sales grew 10 percent to C$281.9 million. The company is seeking to increase sales to a range of C$410 million to C$450 million by the end of fiscal 2019.

Roots plans to establish a presence in Singapore and Malaysia by the end of fiscal 2019. The company is also evaluating partnerships in twelve additional markets over the longer term.

by RTTNews Staff Writer

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