Friday, July 29, 2011

Another IPO: Teavana

Hah! Another IPO! This time by a primarily retail entity that sells loose-leaf tea and tea-related entities named Teavana. (Don't quote me but this name sounds like a mix of tea + nirvana. Hmm. Catchy.) This one caught my interest because it is an Atlanta-based company...and because they wanted to raise $100 million but actually 20% more ($121 million). According to the Atlanta Business Chronicle article, it operates 161 corporate-owned stores in the US in 35 states and oversees 19 franchised stores, mainly in Mexico. Teavana Holdings Inc. began publicly trading yesterday, Thursday, July 28.

Teavana, founded in 1997, received investment from a private equity firm, Parallel Investments, in 2004. According to website, Parallel Investment Partners is "focused exclusively on investing in North American lower middle-market growth companies.  Since 1992, our team has successfully invested over $600 million of equity capital in 35 owner-operated growth companies."

I'm not sure how much of Teavana the private equity firm still owns but the IPO created a liquidity event that now allows them to sell their shares at any time (assuming there are no contractual or other restrictions). That gives a 7-year exit, on the outer edge of the 3-7 year timeframe that equity investors typically like to have.

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