Despite the relative sluggishness of the IPO market this year, renewed economic confidence and impressive performance from companies that have recently gone public indicate that IPOs could pick up in the fall. One company that could be ready for a massive IPO is YETI Coolers, an Austin, Texas-based maker of outdoor lifestyle products.
YETI was founded in 2006 by two brothers, Roy and Ryan Seiders. The Seiders brothers were avid fishermen and felt unsatisfied with their drink-cooling options at the time. Together, they pioneered the luxury cooler market and convinced customers to purchase coolers costing hundreds of dollars, as opposed to the much cheaper industry standard.
YETI's products are primarily distributed through its wholesale channel of over 6,000 retailers including REI, Bass Pro Shops, and Dick's Sporting Goods DKS . The company also has a strong presence on social media and benefits from free, word-of-mouth viral marketing.
On July 1, YETI filed for a $100 million initial public offering. At the time, many assumed the filing was simply a placeholder, and it looks like YETI's IPO could be worth nearly $500 million by the time it happens. Although not much has developed since July, the company's filing gives us an early glimpse at its financials ahead of its other IPO details.
The filing revealed that YETI did $469 million in sales in 2015, which represents a compound annual growth rate of 128% from 2013. YETI also showed that its drinkware segment grew to $225 million in 2015, compared to just $15 million in the year before. The company's EBITDA margin is strong at 29% and it has been profitable since 2013.
YETI's financials appear solid, and the company could be in store for a blockbuster IPO. Investors should expect more details about its offering to pan out soon.
In the meantime, investors interested in IPOs should check out the special edition of Zacks Friday Finish Line, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016, including the possibility of a YETI IPO: Click to get this free report >>
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