Toys ‘R’ Us Ready to Go Public, Again
The private investors who bought Toys "R" Us in
2005 are ready to take the chain public again.
According to reports, Kohlberg
Kravis Roberts & Co, Bain Capital and Vornado
Realty Trust have hired Goldman Sachs for an initial public offering (IPO) the
companies hope will raise upwards of $1 billion. The companies paid $7.5 billion,
including assumed debt, when they acquired the toy store chain.
source said to be involved in the IPO, told the New York Post, "We
will need calm for a few days before actually going public. This will, though,
be a good harbinger for other private-equity-owned retailers going public."
equity firms, according to a Bloomberg report, are taking companies
public to raise funds to pay down debt and increase profits.
According to the Post,
the key reason behind the Toys "R" Us
IPO is its $5.2 billion debt. The company has reported stronger performance
under CEO Jerry Storch, but the debt load is hampering efforts for the chain
to improve performance.
An unidentified analyst told the Post, said the
IPO is likely "to
attract investors who are looking for something more defensive, with strong
cash flow and dividends."
Discussion Questions: Does Toys "R" Us, with $5.2 billion
in debt, sound like a good bet for investors? How much more or less competitive
will Toys "R" Us
become if it has a successful initial public offering? Strictly from a
retailing standpoint, what must the chain do to build on its most recent
- Toys ‘R’ serious – NY Post
- Toys "R" Us files registration statement for IPO – MarketWatch
- KKR, Bain Said to Hire Goldman for $1 Billion Toys R Us IPO – Bloomberg