How a $67 Million Investment Became a $3.3 Billion Windfall

Our readers may find this abstract article in the Wall Street Journal as educational on private market potential: It reveals how Cortec made a $312 Million dollar dividend payment from private company Yeti earlier this year.


“Yeti: How a $67 Million Investment Became a $3.3 Billion Windfall”

Private-equity firm Cortec stands to make 50 times its money in red-hot cooler maker’s IPO.

A small private-equity firm is about to get a big payoff from a bet on $400 coolers.
If all goes as hoped, Cortec Group, with just 20 employees in Midtown Manhattan, could make a profit on paper of about $3.3 billion in the coming initial public offering of Yeti Holdings Inc., according to people familiar with the matter.

The company is seeking a valuation of $5 billion in its IPO, which could come as soon as October, the people said. Cortec bought a roughly two-thirds stake in 2012 for about $67 million, some of the people said.

With U.S. stock indexes near all-time highs and economic growth subdued, the companies behind hot products are trading for high prices relative to their earnings. Under Armour Inc. is valued at 67 times its projected profit for this year, while ski-jacket-makerMoncler SpA trades for 20 times this year’s expected income, according to FactSet.

Still, making back 50 times an investment in four years is nearly unheard of in private-equity circles. It is pretty rare even in the high-return world of investing in tech startups. Cortec already has collected a $312 million dividend payment from Yeti earlier this year, according to a regulatory filing.


Abstract published for educational purposes only.