Almost two years after Dollarma Inc.'s initial public offering, Bain Capital has sold the remainder of its position in the company, capping off an undoubted success for the private equity player.
Since the IPO, Dollarama's stock is up a whopping 67 per cent, and Bain has exited the company in a steady and calculated manner. In 2010 Dollarama launched three different secondary bought deals that saw Bain sell off about 15 per cent stake in the company each time.
Bain then made its final exit the through a block trade on Tuesday morning that crossed at $32.50, selling its remaining 14 per cent stake.
It's a solid time for Bain to exit. Dollarama recently posted another set of strong quarterly earnings, and also enticed shareholders by announcing its first dividend. Moreover, now that market are shaky, Bain could possibly be getting out at a near-term top.
Whether or not the investors who have stayed in the stock will prosper is a different story. Although Bay Street sell side analysts love the name, Veritas Corp. has taken its own look at the name and sees some potential downsides that could hamper the stock in the near future.
The argument centres around three main points: store traffic has fallen in two consecutive quarters, as measured by number of transactions, Dollarama has been raising its prices to account for inflation and competition in this market in intensifying. You can read more about this argument here.
RBC has been Dollarama's lead banker throughout the IPO and secondary offerings