• Last Updated:
  • Jun 2nd, 2017 10:25 am
Tags:
Deal Addict
User avatar
May 6, 2010
2062 posts
96 upvotes
Markham
catoun wrote:
Feb 17th, 2017 2:53 pm
Some additional info provided in the preliminary long form prospectus available on Sedar.

On December 9, 2013, Canada Goose sold 70% of its equity interest to Bain Capital, a private equity capital firm.

The # of subordinates shares to be issued is still unknown. However, "any Class A multiple voting shares that are sold by the selling shareholders as part of this offering will be converted into subordinate voting shares prior to the closing of this offering".
Bain Capital currently owns 100 million Class A shares, and a 1-for-N split of these shares is a also possibility.

Other notes :
In plain English, anyone?
Deal Addict
Dec 6, 2006
3568 posts
614 upvotes
Toronto
So the Class A holders can sell (and profit).. and then the sold shares are converted to Class B common shares and dilute the shares, yeah?
Basically current Class A holders profit while common holders hold the bag?
Member
Aug 17, 2008
485 posts
133 upvotes
"On December 9, 2013, Canada Goose sold 70% of its equity interest to Bain Capital, a private equity capital firm."

* Bain Capital bought into CG thinking they could flip some of their ownership for (1) a substantial profit to greater fools. That would be anyone looking to buy these shares.

"The # of subordinates shares to be issued is still unknown. However, "any Class A multiple voting shares that are sold by the selling shareholders as part of this offering will be converted into subordinate voting shares prior to the closing of this offering". "

* (2) The greater fools will be owning shares that have fewer voting privileges or rights than Bain Capital's Class A shares, e.g. For every new shares' single vote, Bain Capital's Class A's may have 10 votes.

"Bain Capital currently owns 100 million Class A shares, and a 1-for-N split of these shares is a also possibility."

* (3) Seems self explanatory

* (4) I have not read; nor do intend to, see how the founders shares are classified. Details are probably in the prospectus that @catoun pointed towards. This is not the only Cdn company with this voting structure. Couche-Tard, Rogers, and Bomber (public bailout $) are some that come to mind. There's been a push to move away from this, but the founding families have so far successfully held off the outside investor demands.
Member
Aug 17, 2008
485 posts
133 upvotes
further

""The # of subordinates shares to be issued is still unknown." => They will sell an amount based on the demand and feedback they get from institutional investors. IMO, this is strictly a retail targeted offering unless CG shows some kind of substantial profit margin and potential growth.
Newbie
Dec 25, 2015
19 posts
6 upvotes
Canada Goose will have a lot of runway for growth in the U.S., this could get interesting IMO
Sr. Member
Aug 19, 2016
618 posts
184 upvotes
wolfs004 wrote:
Feb 18th, 2017 1:41 pm
Canada Goose will have a lot of runway for growth in the U.S., this could get interesting IMO
Canadian companies have had a history of failures in the US. The American companies are much more competitive than Canadian.
Deal Addict
Dec 6, 2006
3568 posts
614 upvotes
Toronto
wolfs004 wrote:
Feb 18th, 2017 1:41 pm
Canada Goose will have a lot of runway for growth in the U.S., this could get interesting IMO
CG sightings in California Texas and Florida would be awesome .
Deal Addict
User avatar
May 2, 2006
4922 posts
1005 upvotes
GTA
It didn't take me long to decide to pass on this one... CG became what it is because it was a niche brand for a while, limiting their supply to create artificial demand and buzz. It worked great for a small company, but the more they try to expand, the more it will diminish the brand. I also own a CG jacket (w/ black logo) and while the design is good, I often prefer to wear my other cheaper and warmer jacket from Marmot in the winter. There is nothing special or unique about CG products.
Deal Addict
Sep 20, 2014
1147 posts
363 upvotes
Calgary, AB
I'll add to the list of reasons not to buy:

- Fashion is fickle so there is always an inherent risk in a company that sells merchandise at this price point. Canada Goose remains especially susceptible since it seems to be a primary target for the animal/environmentalist lobby. They don't like it when celebrities wear it and constantly complain about this. I fear this will get to the point where it will actually start driving the moderates away from the product.

- Value is hard to calculate. These are winter weather parkas and there is a limited amount of these that they can sell...it's main selling point is the brand. Not sure if I can buy into that considering they charge $1,000 for each of them.
Newbie
Jan 6, 2015
17 posts
6 upvotes
Québec
boyohboy wrote:
Feb 18th, 2017 4:00 pm
CG sightings in California Texas and Florida would be awesome .
All 3 states with no winter
Member
Aug 17, 2008
485 posts
133 upvotes
I drove by the main Sporting Life store yesterday, for those in Toronto you'll know where and outside was the largest Canada Goose poster I've ever seen. Typical SL advertising covering about 1/3 of their wall, but it made me chuckle. I wonder if they are holding off due to year end Mar coming up or a lack of traction?
Member
Oct 31, 2006
447 posts
70 upvotes
I don't understand why everyone is talking about fashion trends here.

When buying an IPO, you need to assess what the intrinsic value of each share is vs. what it IPOs at.

On average, IPOs run up during first day of IPO and then underperform the market afterwards.

Canada Goose enjoys great sales, a high margin business and an untapped US market. What you need to do is assess whether that growth opportunity is baked into the stock price or not. It would also be essential to see what percentage of shares are sold off.
Sr. Member
Feb 1, 2015
594 posts
128 upvotes
MB
Paymethemoney wrote:
Feb 24th, 2017 10:06 am
I don't understand why everyone is talking about fashion trends here.

When buying an IPO, you need to assess what the intrinsic value of each share is vs. what it IPOs at.

On average, IPOs run up during first day of IPO and then underperform the market afterwards.

Canada Goose enjoys great sales, a high margin business and an untapped US market. What you need to do is assess whether that growth opportunity is baked into the stock price or not. It would also be essential to see what percentage of shares are sold off.
Take a breath! There's nothing to assess for now. The price and the # of subordinate shares to be issued haven't been released.
Sr. Member
Feb 1, 2015
594 posts
128 upvotes
MB
Following the amendment of the long form prospectus :

- price between $14 and $16
- 20 million subordinate shares that will be sold in two lots.
- and additional 3 millions shares that may be sold by the selling shareholders pursuant to the over-allotment option.
- 87 149 000 multiple voting shares (if the over-allotment option is not exercised)

That's a total of 107 149 000 shares.

Financial Statement (in million)
  • Revenue (ttm) : $394.6
  • Ebitda (ttm) : $67.4
  • Net Income (ttm) : $35.9

EPS (ttm) = $0.33
P/E (ttm) = 51 @ $17/share


Enterprise Value (in million)
  • Market Cap. @ $17 : $1 821.53
  • - Cash : $30.2
  • + Total Debts : ($278)
  • + Employee Benefits: ($7.1)
= $2 076.43

EV/Ebitda = 30.8

Edit:
Updated valuation with share price of $17.
Last edited by catoun on Mar 2nd, 2017 2:16 pm, edited 4 times in total.
Penalty Box
User avatar
Dec 16, 2015
574 posts
202 upvotes
boyohboy wrote:
Feb 17th, 2017 11:30 am
I really don't understand CG... or rather, people who're so into CG. The stores aren't even on sale and people are lining up like crazy... rushing into the stores and grabbing MULTIPLE overpriced coats. It's like zombies trapped with fresh meat. And they all look pretty much the same for crying out loud....
Because of reverse discount...if you hike your prices every year, sheeps will line up and buy more at current prices

Top