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  "documentTitle": "Canadian Tire Corporation (CTC.A)",
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  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-12-05 00:00:00",
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  "notes": "Uses a comparison table to draw parallels between two acquisitions to suggest a negative outcome for the second.",
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      "kind": "callout",
      "text": "Party City's recent revenue and EBITDA growth looks very similar to Helly Hansen's performance leading up to the acquisition. Is it a coincidence that Party City has been private equity owned and Thomas H. Lee Partners remains its largest shareholder?",
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      "kind": "callout",
      "text": "Why wouldn't Party City Canada face the same pressure from e-commerce as Party City has in the United States? The pressure on Party City's U.S. business has resulted in the closure of 45 stores in 2019",
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      "kind": "callout",
      "text": "We believe there are many similarities between CTC's acquisition of Party City's Canadian business and its failed acquisition of Helly Hansen.",
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      "text": "Historical and Forecasted Retail Sales and EBITDA for Party City Canada",
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      "text": "EBITDA growth: 75%+",
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      "text": "We believe Party City Canada's financial forecast is overly optimistic and reminds us of the optimism before the Helly Hansen acquisition. We find it very hard to believe the projected 25% revenue CAGR given customers accessibility to purchasing party goods online and the overall weakening retail sector",
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      "text": "We believe there are many similarities between CTC's acquisition of Party City's Canadian business and its failed acquisition of Helly Hansen. In our opinion, CTC overpaid for Party City Canada based on overly optimistic 3-year financial assumptions of doubling sales and 75%+ EBITDA growth.",
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      "text": "Source: Company filings, Spruce Point analysis",
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      "text": "Comparison table of Helly Hansen vs Party City Canada across various metrics",
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      "kind": "title",
      "text": "Round 2: Acquisition of Party City Canada",
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