Restoration Hardware sets IPO stock pricing between $22 and $24 a share

Jay McIntosh -- Kids Today, 10/23/2012 11:09:50 AM

Restoration Hardware says it expects its planned initial public offering of stock will be priced at $22 to $24 per share, raising about $114 million to $124 million for the home furnishings retailer.

Restoration said in a Securities and Exchange Commission filing that it, along with some selling shareholders, will sell what amounts to a 13.3% stake in the company to the public.

A little over two thirds of the equity will remain in the hands of the current owners, investment funds Catterton Partners, Tower Three Partners and Glenhill. Other existing shareholders will hold the remainder.

The share pricing will place the company's value at about $850 million. That is nearly five times the company's value of about $175 million in 2008, when Catterton, Tower Three and then-CEO Gary Friedman took it private.

Restoration said it will use the net proceeds of the offering, expected to be around $93 million, mainly to reduce debt.

After the offering, the stock will be traded on the New York Stock Exchange under the ticker symbol "RH," the company said. A date for the offering has not been set.

BofA Merrill Lynch and Goldman Sachs are the lead underwriters for the offering.

In an updated prospectus, the retailer said it had increased revenue by 53% from fiscal 2009 to fiscal 2011, to $958.1 million in the year ended Jan. 28, 2012. It also said it has achieved 10 consecutive quarters of double-digit revenue growth through its fiscal quarter ended July 28, and has reduced its store count to 73, down from 95 in January 2010.

Restoration Hardware is No. 17 on Furniture/Today's Top 100 U.S. Furniture Stores ranking, with estimated furniture, bedding and accessories sales of $515 million in the 12 months ended July 30, 2011. That was up 25.6% from the year before, when it was ranked No. 25.