Return to search

Sentinel grosses $109m in yarn IPO

The New York middle market firm has partially exited Canadian yarn maker Spinrite in a C$203m flotation, scoring almost six times its initial $19m invested a year ago.

New York-based private equity firm Sentinel Capital Partners has announced the flotation of Canadian yarn maker Spinrite to the tune of C$202.9 million ($163 million; €127 million).

According to a statement, the initial public offering, structured through a Canadian Income Fund, yielded Sentinel gross cash proceeds of approximately $109 million, approximately 5.7 times the firm’s original $19 million investment in January 2004.

Sentinel will continue to hold approximately C$34 million worth of Spinrite’s subordinated holding units, which represents about 13 percent of the company’s ownership.

Founded in 1952, Listowel, Ontario-based Spinrite was a family-run manufacturer and marketer craft yarn products in North America until Sentinel partnered with management to recapitalise the firm last year.

In a previous interview with PrivateEquityOnline.com, Sentinel founder and managing partner David Lobel said Spinrite had been looking for a equity backer that could balance the company’s family’s needs with the needs of the business, which are both deeply ingrained in the small town community in which the company is based.
 
In the time since Sentinel entered the picture, Spinrite expanded its distribution line beyond specialty boutiques, into mass consumer craft products stores such as Michael’s.

Sentinel partner Eric Bommer says in the past year, Spinrite has attained a significant market share in the US. He also points to the market trends of an aging Baby Boomer generation and growing interest in knitting among younger generations.

“Taking the company public was a good way for the company to reach the next stage of its development,” Bommer says. “At the same time, it allowed us to realise a significant liquidity event while continuing to hold a meaningful stake in the company going forward.”

Spinrite Income Fund is listed on the Toronto Stock Exchange. The offering’s underwriters were led by Scotia Capital and CIBC World Markets.