Chip Wilson doubled down on his investment in Amer Sports, buying $324 million worth of shares at the company’s IPO, according to the final prospectus filed with the Securities & Exchange Commission Friday.
Wilson, best known for founding Lululemon Athletica, bought 24.9 million shares of Amer Sports at its IPO price of $13 a share. The billionaire had previously indicated he would buy up to $220 million worth during the offering, meaning he upped his bet by 50%, taking advantage of a perceived bargain as Amer’s IPO fell short of expectations. The executive already owned 79.1 million shares of Amer ahead of the IPO.
The bet, so far, has been a good one. In its first two days of trading Amer Sports advanced $1.95 a share, adding $203 million to Wilson’s estimated $6.6 billion fortune.
Amer Sports is the parent company of 11 sporting-goods brands, including Wilson, provider of official basketballs for the NBA, WNBA and NCAA, Salomon, which makes skis and hiking boots, and Arc’teryx, a high-end outdoor clothing manufacturer.
Wilson’s bullishness on Amer runs counter to the apparent attitude of Wall Street going into the offering. The company had initially sought to sell shares between $16 and $18 and reach a market value of $8.3 billion, but in the IPO last week the price had fallen to $13 a share, meaning Amer came public at a $6.3 billion market capitalization.
Wilson acquired Amer Sports in 2019 in a take-private deal led by China’s Anta Sports and with the participation of FountainVest and Tencent, two other Chinese companies. While Wilson continues to continues to own 10.7 million shares of Lululemon worth almost $5 billion, his bet on Amer is a sizable one nonetheless. He and his partners acquired the then-Finnish business for $5.5 billion and turned the conglomerate’s focus toward mainland China. Given Wilson owned about 20% of Amer headed into the IPO, he presumably committed about $1.1 billion of his wealth to the deal.
With Amer at $14.95 as of Friday’s close of trading in New York, his 104 million shares in the business are now worth $1.56 billion.
But the 15% rally in Amer Sports share value since the IPO overshadows the fact the sporting goods business still isn’t beloved by Wall Street. Other Amer insiders—Anta, Tencent, FountainVest and Amer’s chairman Shizhong Ding, bought large numbers of shares at the IPO, though none as large as Wilson’s purchase. Overall, Wilson and those insiders purchased 63 million of the 105 million shares offered to investors with the IPO.
The syndicate has strong incentive to support shares of the business: Based on information contained in the prospectus, Wilson and partners took out more than $4 billion in debt to finance the 2019 purchase of the conglomerate. The $1.3 billion proceeds from the IPO went to pay off some of that debt, while the rest of it was converted into equity in Amer Sports.
As of today, Wilson owns about 21% of Amer stock, making him the second largest shareholder, behind Anta Sports’ 48% stake.
