Party City (PRTY) IPO Opens Up 21%

Today's IPO for Party City (NYSE: PRTY) opened for trading at $20.50 after pricing 21,875,000 shares of common stock at $17 per share, the high end of the expected $15-$17 range.

Goldman, Sachs & Co., BofA Merrill Lynch, Credit Suisse and Morgan Stanley are acting as lead book-running managers and representatives of the underwriters in the offering. Barclays, Deutsche Bank Securities and J.P. Morgan are also acting as book-running managers for the offering. William Blair, Stephens Inc. and Telsey Advisory Group are acting as co-managers for the offering.

Party City Holdco Inc. is the leading party goods retailer in North America and the largest vertically integrated supplier of decorated party goods globally. The Company is a popular one-stop shopping destination for party supplies, balloons, and costumes. In addition to being a great retail brand, Party City Holdco Inc. is a global, world-class organization that combines state-of-the-art manufacturing and sourcing operations, and sophisticated wholesale operations with a multi-channel retailing strategy that includes the Party City brick and mortar and e-commerce retail operations. The Company is the leading player in its category, vertically integrated and unique in its breadth and depth. Party City Holdco Inc. designs, manufactures, sources and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery throughout the world. The Company's retail operations include over 900 specialty retail party supply stores in the United States and Canada, operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com. The Company also franchises both individual stores and franchise areas throughout the United States and Puerto Rico, principally under the name Party City.

The company grew revenue from $1,599.1 million for the year ended December 31, 2010 to $2,271.3 million for the year ended December 31, 2014. The company increased adjusted EBITDA from $230.6 million, implying an adjusted EBITDA margin of 14.4%, for the year ended December 31, 2010 to $362.1 million for the year ended December 31, 2014, for an implied adjusted EBITDA margin of 15.9%. Net income increased from $49 million for the year ended December 31, 2010 to $56 million for the year ended December 31, 2014. Net income during 2014 was impacted by higher interest expense, resulting from debt incurred in conjunction with the Transactions and the issuance of the $350 million senior PIK toggle notes, as well as the impact of non-cash purchase accounting adjustments resulting from the Transactions and the impact of non-recurring charges related to refinancings.

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