At Home Starts Trading, Expects to Raise $130 Million

August 5, 2016  by in Business Strategy, Industry   

At that price, shares are expected to bring At Home $130.5 million in proceeds.

According to documents filed last week with the U.S. Securities and Exchange Commission, At Home planned to offer 8.667 million shares, or a 15 percent ownership of the company, for between $14 and $16 each. The company’s underwriters, Bank of America, Jefferies, Goldman Sachs & Co., Morgan Stanley, Evercore ISI, Guggenheim Securities and William Blair, also have a 30-day option to buy up to an additional 1,300,050 shares.

At Home started trading at $16.25 a share on Thursday, eight percent above its initial public offering price of $15 a share, but the stock dropped off from yesterday mornings high. It closed unchanged at $15.

At Home has been growing its store base at a rate of 20 percent a year in the last three years, said CEO Lee Bird. It now has 115 stores in 29 states across the South and Midwest and still hasn't opened a store in some of the largest states including California and New York. The U.S. can handle 600 At Home stores, Bird said, making it a growth story for a long time.

In an interview with the Dallas Business Journal, Bird said his company did not need IPO proceeds to continue expanding.

“We can self-fund all of our growth, so we don’t need to go public for cash, we just want to provide a good return for our investors and we will do that when we feel the market warrants,” he said.

The company, which had annual sales of $653 million, has posted eight consecutive quarters of 20 percent total sales increases and nine consecutive quarters of same-store sales growth, or stores that have been open at least a year.

Proceeds of the IPO will be used to pay down debt.

At Home stores are filled with home furnishings, accessories and seasonal merchandise. It swaps out an average of 400 new items a week. But the company keeps operating costs down by opening new stores in spaces vacated by department stores and discount chains, he said.

At Home raised about $130 million selling 8.77 million shares to the public. That represents about 15 percent of the company which is owned by private equity investors AEA Investors LP and Starr Investments.

As far as the challenges of being under Wall Street's scrutiny, Bird said, "We're going to focus on what we can control. I can't control the stock price."