Monday, Nov 30th 2020

Collectors Universe to be acquired for $75.25 per share


Today, Opportunities holding Collectors Universe (CLCT) announced that it would be acquired by a syndicate of investors for $75.25 per share in cash, or a value representing an ~80% return since we first initiated our position in the stock about three months ago.

The acquiring investor group consists of several very prominent investors including Nat Turner, D1 Capital Partners, and Cohen Private Ventures.

Overall, we're pleased with this outcome and are happy to see multiple high-profile investors see the potential that lies ahead for the company.

That said, we were also looking forward to owning this business for multiple years and think a valuation closer to $100 per share could have easily been supported given the company's recent progress and growth.

At the transaction value, which was struck at a 30% premium to the company's 60-day volume-weighted average price (VWAP), the company would be valued at approximately $700 million in aggregate.

We see this 30% premium as relatively standard for acquisitions of this nature, but also see the use of a 60-day VWAP as fairly conservative given the company's recent growth.

In a few years, we wouldn't be surprised to see CLCT trade hands again in the $2-3 billion range in a deal with a large strategic acquirer like eBay.

That said, stepping back we're pleased with the incredible pace at which our thesis on the company has materialized and look forward to redeploying our allocation in the stock towards another exciting investment opportunity. Be sure to stay tuned in the app for more.

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