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Leading Fastener, Hardware Company Hillman Group Lands $2.6B SPAC Deal: What Investors Should Know

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Leading Fastener, Hardware Company Hillman Group Lands $2.6B SPAC Deal: What Investors Should Know

Hardware distributor Hillman Group is going public after 56 years as a private company.

The SPAC Deal: Hillman Group is going public with Landcadia Holdings III (NASDAQ: LCY), a SPAC from Tilman Fertitta who recently took Golden Nugget Online (NASDAQ: GNOG) public with his second Landcadia SPAC.

The deal values the company at $2.64 billion. The companies were reported as being in talks earlier this month in a Bloomberg story at a value of over $2 billion.

Shares of the new company will trade as "HLMV" on the Nasdaq.

Current Landcadia Holdings III shareholders will own 26% of the new company.

Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021

About Hillman Group: Hillman is a leader in the sale of fasteners, hardware, work gear, gloves, personal protection equipment and key duplicating.

The company has products at over 40,000 locations, including leading hardware and home improvement stores like The Home Depot Inc (NYSE: HD) and Lowe’s Companies Inc (NYSE: LOW).

Hillman maintains the No. 1 market share position in several categories and has a total addressable market of $45 billion.

Growth: Hillman sees trends like millennials buying homes and the migration to the suburbs as keys to growth.

The company has completed over $550 million in acquisitions since 2018, which it said will help with future sales growth.

Financials: Hillman Group has grown sales in 55 of its 56 years. Revenue is estimated to be $1.4 billion for fiscal 2020.

The company forecasts revenue to grow 6% annually and adjusted EBITDA to grow 10% annually.

Revenue grew at an annual rate of 17.7% from 2017 to 2020, which was the highest in Hillman’s listed peer group.

Benzinga's Take: This SPAC deal is bringing a profitable company public that has grown sales in 55 of its 56 years. The company is a market leader in many of its categories selling 20 billion fasteners, 575 million pairs of gloves and 116 million key duplicates annually.

Hillman gets 48% of its sales from Home Depot and Lowe's, which is a high percentage but comes from two of the leading names in retail. This deal could be getting overlooked by investors, with shares now falling under $11. 

LCY Price Action: The stock was down 1.81% at $10.33 at last check Monday, after trading as high as $11 in the premarket session.

 

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Posted-In: home improvement stocks SPAC SPACs Tilman FertittaNews Small Cap IPOs Trading Ideas Best of Benzinga

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