In an initial public offering (IPO) on Wednesday morning, Burlington Stores Inc. (BURL) sold 13.3 million shares at an IPO price of $17 a share and quickly jumped 38% to trade around $23.45. The expected price range had been $14 to $16. Net proceeds from the offering total approximately $206 million. The underwriters have a 30-day option on 2 million additional shares.
The company is the parent of Burlington Coat Factory stores and was taken private in 2006 by Bain Capital for about $2.06 billion. Bain will retain ownership of approximately 80% of the outstanding shares.
Net proceeds from the offering will be used to redeem $170.6 million 9%/9.75% of senior notes due in 2018, an $11 million termination fee to an affiliate of Bain Capital and for other general corporate purposes.
Burlington Coat Factory owns 503 stores in 44 states and Puerto Rico. As a discount clothing retailer it competes with Ross Stores Inc. (ROST) and TJX Companies Inc. (TJX). The retailer filed for its IPO at about the same time as Neiman Marcus, but has beaten the luxury retailer to market.
Shares of Burlington are up about 37.7% at $23.43 after the first 40 minutes of trading this morning.