Chip Wilson, renowned for his founding role in Lululemon Athletica, has significantly bolstered his investment in Amer Sports, purchasing $324 million worth of shares during the company's initial public offering (IPO), as indicated in the final prospectus filed with the Securities & Exchange Commission on Friday.
At the IPO price of $13 per share, Wilson acquired 24.9 million shares of Amer Sports, marking a notable increase from his initial commitment. Previously expressing his intention to purchase up to $220 million worth of shares during the offering, Wilson expanded his bet by 50%, seizing what he perceived as an opportune moment as Amer's IPO fell short of expectations. Notably, prior to the IPO, Wilson already possessed 79.1 million shares of Amer.
This strategic move has proven lucrative for Wilson thus far. With Amer Sports witnessing a $1.95 per share increase in its first two days of trading, Wilson's estimated fortune of $6.6 billion saw a substantial boost, adding $203 million to his wealth.
Amer Sports stands as the parent company of 11 prominent sporting-goods brands, including Wilson, renowned for providing official basketballs for leagues like the NBA, WNBA, and NCAA, Salomon, recognized for its production of skis and hiking boots, and Arc’teryx, a leading manufacturer of high-end outdoor clothing.
Wilson's bullish stance on Amer contradicts the prevailing sentiment on Wall Street leading up to the offering. Initially seeking to sell shares at a higher price range of $16 to $18, Amer eventually went public at $13 per share, translating to a market capitalization of $6.3 billion, lower than the initially anticipated $8.3 billion.
In 2019, Wilson played a pivotal role in the take-private acquisition of Amer Sports, spearheaded by China's Anta Sports, alongside participation from FountainVest and Tencent, among other Chinese entities. Despite maintaining ownership of approximately 10.7 million shares of Lululemon valued at nearly $5 billion, Wilson's substantial investment in Amer remains noteworthy. With an initial acquisition cost of $5.5 billion, Wilson redirected the focus of the conglomerate towards mainland China.
Following the IPO, Wilson's stake in Amer, comprising 104 million shares, has seen a valuation of $1.56 billion, with shares trading at $14.95 as of Friday's closing in New York. However, despite the subsequent 15% rally in Amer Sports' share value, the sporting goods business still faces some skepticism from Wall Street.
Wilson's significant purchase of Amer shares during the IPO, alongside other insiders such as Anta, Tencent, FountainVest, and Amer's chairman Shizhong Ding, underscores a collective effort to bolster investor confidence. This concerted support is crucial, considering the substantial debt incurred by Wilson and his partners during the 2019 acquisition of the conglomerate. While the IPO proceeds partially addressed this debt, the syndicate's vested interest in enhancing Amer's performance remains evident.
Presently, Wilson commands a 21% ownership stake in Amer stock, positioning him as the second largest shareholder, trailing behind Anta Sports' dominant 48% stake.