👉 Background: Retail Zoo is the company that was founded by Janine Ellis of Shark Tank fame. It's the owner of Boost Juice, Betty’s Burgers, Salsa’s Fresh Mex and CIBO Espresso.

👉 What happened: Back in 2014, private equity behemoth Bain Capital came in and acquired 70% of Retail Zoo. Since then, Retail Zoo has more than doubled the number of stores and nearly doubled total network sales too.

👉 What else: Now, another private equity player, named Adamantem Capital, will nab Bain’s 70% stake, which supposedly values the Retail Zoo company at around $350 million. This comes after Bain Capital explored listing Retail Zoo on the share market multiple times over the past few years

What's the key learning?

💡 Private equity aims to invest in a business, help that business grow and then sell the business for a tasty profit. And they most often sell by listing the publicly on a stock exchange like the ASX

💡But now isn’t the best time to go public. There were just 89 IPOs in 2022 - down from 202 in 2021. And just 29% of ASX IPOs from 2022 were trading above their listing price.

💡So it makes sense that Retail Zoo’s majority owners Bain Capital would prefer to sell for a fixed price to another PE firm…rather than roll the dice with a public listing and face the risk of declining share price.

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