SCOTTS VALLEY, CA (BRAIN) — Fox Factory Holding released more details on its planned IPO Tuesday, but it still has not set a date for the auction.
The company plans to offer 2,857,143 shares of common stock, and its current stockholders will offer up an additional 5,714,286 shares, or 8.6 million shares in total. The company expects shares to sell between $13 to $15 initially, potentially raising $120 million for Fox at a $14 mid-range value.
The company’s majority owner, Compass Group Diversified Holdings, is offering 4.7 million of its shares in the IPO, with an estimated value of $66.3 million at the $14 mid-range value. Currently Compass has a 25.4 million-share stake in Fox, giving it 76 percent ownership. After the IPO, Compass would own approximately 57 percent of Fox.
Company founder Bob Fox has a 14 percent stake in the company, controlling 4.6 million shares. He is offering 866,723 of his shares, worth $12.1 million at $14, to the IPO. Fox would retain a 10 percent stake in the company after the IPO.
Madison Capital Funding Co-Investment Fund is offering 112,674 shares of its current two percent ownership stake to the IPO, and would retain a one percent stake after the offering.
The company’s directors and executive officers would own 14 percent of Fox after the sale. So Compass, Fox and other officers would retain 71 percent ownership and control all matters requiring stockholder approval, including the election of directors, approval of any merger, consolidation, or sale of all, or substantially all, of Fox Factory Holding’s assets.
If the IPO is successful, Fox will not have $120 million to invest in R&D or new manufacturing equipment because $67 million of the IPO sale is earmarked to pay off a special dividend shareholders paid themselves in June 2012, which the company is currently carrying as debt.
The bike business accounts for 67 percent of Fox’s overall sales in 2012, with its power sport sales, including OEM suspension to auto makers, accounting for 33 percent. Fox recently announced its Taiwanese facility is up and running to service Asian OE bike manufacturers.