RH -3.83% Once teetering on the edge
of bankruptcy and subject of a buyout bidding war during which offers shrank, Restoration Hardware Holdings Inc. RH -3.83% is turning into a bonanza
for its private-equity owners.
The
firms that bought the luxury-home-furnishings retailer in 2008 are on track to
make about eight times their initial investment, when including their remaining
stock holdings in the company, according to a Wall Street Journal analysis of
securities filings. This is a huge return among deals struck in the years
leading up to and during the financial crisis.
Restoration
Hardware has a stock-market value of about $2.7 billion.
Five
years ago, as the housing crash crimped the company's profits, a group led by
Connecticut private-equity firms Catterton Partners and Tower Three Partners
LLC and the retailer's chief executive took the company private for about $177
million.Restoration still doesn't turn out consistent profits. But today the retailer, which returned to public ownership in a November initial public offering, has a stock-market value of about $2.7 billion.
At one point last week, shares traded at more than three times their IPO price of $24. The surge has prompted the company's owners to cash in. Late Thursday, the buyout group and executives sold some $560 million of stock.
The deal followed a similarly sized sale in late May that returned about $497 million.
The success shows that even as the buyout business matures and big gains are seen as more difficult to come by, some deals can prove runaway winners.
