Two new IPOs are on my radar.
Recently, there have been a number of interesting developments in the IPO markets, an area I typically do not closely follow. However, two new issues have my attention.
Now, that does not mean I will necessarily be buying either at the outset prior to letting the dust settle, but they are certainly on my radar.
The first is wine name Duckhorn Portfolio (NAPA) , which went public last month. NAPA, which generated $270 million in revenue and $32 million in net income in 2020, operates in the luxury wine space, and its brands include Duckhorn Vineyards, Goldeneye, Paraduxx, Canvasback, Calera, and Kosta Browne.
NAPA went public at $15/share, on March 19, and closed Friday at $18.90. By my count, NAPA is the largest U.S. publicly traded pure wine play. It dwarfs Willamette Valley Vineyards (WVVI) , and an even smaller pink sheet name I own that is too small and illiquid to mention in this column.
The second name that has my attention is not yet public, and is coming back to the markets after being taken private in 2007 (much to my chagrin at the time, I owned shares and was not pleased with the takeout price). It is none other than Topps, the iconic baseball card maker, also known as the purveyor of Bazooka bubblegum. Fourteen years ago, a group that included former Disney (DIS) CEO Michael Eisner took Topps private for $385 million.
Topps is set to be taken public once again via SPAC (special purpose acquisition company) Mudrick Capital (MUDS) . In 2020, Topps generated $567 million in revenue, and $83.7 million in net income. The bulk of revenue (90%) was generated from Physical Sports and Entertainment (55%) and Confections (35%), with the balance from Digital Sports and Entertainment (6%) and Gift Cards (4%).
A Mudrick Capital Presentation on Topps presents a rosy future for the company, projecting 2022 revenue at $777 million, and pro forma adjusted EBITDA of $115 million.
The baseball card market has changed a great deal since I was a kid; long gone are the days of buying wax packs for 25 cents or later, 50 cents. You can’t even find cards in every store the way you could years ago.
Today’s cards are very high-end, with many varieties and sets to choose from, with a great number of gimmicks to entice purchase. Long gone are the sticks of gum you’d find in each pack. However, it is still a big, and seemingly profitable business.
Two more names to follow…
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