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The private equity firm that took Weber (WEBR 23.23%) public last year has made a deal to take the grill maker private again. The offer price is well above Weber’s closing price on Friday, and shares were up by as much as 25.2% on Monday morning as a result. As of 10:22 a.m. ET, they were trading up by about 24%.
Weber makes great grills, but the company’s tenure in the public markets has been underwhelming. It went public in August 2021 with a whimper, first cutting the size of its proposed stock offering by more than half and then pricing it below the expected market range. Weber sold 18 million shares for $14 apiece, raising about $250 million. It had originally hoped to sell nearly 47 million shares for between $15 and $17 apiece.
Weber’s majority owner, BDT Capital Partners, did not participate in the offering and remained among the company’s largest shareholders.
On Monday, BDT Capital agreed to take the company private once again. Terms of the deal value Weber at $8.05 per share, a 60% premium to the stock’s trading price on Oct. 24, when rumors of a buyout first surfaced. But that’s still 40% below Weber’s IPO price.
In hindsight, Weber apparently should have never gone public. While its brand is well-respected, a grill is more of a one-off purchase than an oft-repeated purchase. Weber had hoped to generate more recurring revenue through subscriptions for recipes and other services, but those income streams have been slow to materialize.
The deal is sure to be bittersweet for shareholders who still have to approve the transaction. Anyone who bought during the IPO is way down on their investment — and so are those who invested at any point during Weber’s first half a year or so as a public company. But given that BDT Capital Partners’ bid is well above the price at which the market has valued Weber, there’s no guarantee those investors would see the stock hitting a higher price than that any time soon if they vote “no.”
Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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