Toys R Us was an Opco-Propco deal done by KKR, Bain, and Vornado in 2005 for $6.5+ billion. The company was one of the largest owners of real estate in the United States, other than McDonalds. Since the toy business was not performing well and Babies R Us could not yet produce enough EBITDA to drive the company's public valuation, these three players found an opportunity to take advantage of its real estate holdings (good call, right?). Unfortunately, the company now has $5.5 billion in its balance sheet and only has 2.3% growth in sales, a $35mm loss in earnings, down from $95mm in profit last year, and a 25% in expenses year over year (SA). Cash used in operations also increased from $800mm to $1.2 billion over that time period. Sounds like a great time to IPO, right? Well, the sponsors in this deal seem to think so. With equity markets topping, they are trying their hardest to take advantage of foolish retail investors. Invest at your own risk:
"(Reuters) - Toys R Us Inc TOY.UL is looking to raise around $800 million in an initial public offering in April, though a final decision has not been reached, the New York Post said on Saturday.
The New Jersey-based retailer, which operates stores under its namesake brand and the Babies R Us and FAO Schwarz labels, had put off plans for an IPO in 2010.
"Toys R Us took more market share from competitors last year than they have in the past 20 years," said one source the Post described as close to the company. "But I don't think they were satisfied with how they did on the profit level."
Toys R Us spokeswoman Kathleen Waugh said the company could not comment on the matter.
For December 2010, Toys R Us reported a 5.4 percent total sales rise at its U.S. unit as it lured holiday shoppers away from No. 1 toy retailer Wal-Mart with more temporary stores and exclusive toys. But same-store sales fell 5 percent at its international segment.
Overall, a tough 2010 holiday season had margins hit across the toy industry by bargain-seeking, recession-hit consumers.
So the economic environment has stoked continued debate between management and owners at Toys R Us about whether this is the best time to re-launch an IPO, according to a source briefed on the situation, the Post reported.
Toys R Us was taken private in 2005 by Kohlberg Kravis Roberts KKR.AS, Bain Capital and Vornado Realty Trust in a $6.6 billion deal.
In May 2010, the company filed to raise as much as $800 million in an IPO. But that was not launched.
Toys R Us's net loss widened to $93 million in the third quarter ended on October 30, 2010, from $67 million a year earlier. While sales were up 1.9 percent in the period, total operating expenses rose about 9.4 percent.
Last fall, the retailer opened 600 smaller "pop-up" stores that added to the more than 850 larger year-round stores it operates in the United States, the Post said."
Who the F@#$ do they we are? Oh yeah, retail investors.
Kravis is probably listening to too much lil wayne...not his hood anymore. Gov. controlled economy.
Bitch I'm on probation, so my nerves bad And they say time fly's, well mine's first class I landed in the sky, I fell from the streets I talk a lot of sh-t and practice what I preach Back from hell, cell 23, tell the warden kiss my ass Pockets on Monique Bitch I'm from the murder capital Hoe, I'm far from practical Shit happens and since I'm the shit, I'm who it happens to Young Money, Cash Money, blood bitch, I'm red hot I don't see nobody, see nobody like a head shot All that bullshit is for the birds, throw some bread out Got it sewn up, check the thread count
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