Investors looking to try Birkenstocks on for size have the definitive measurements of the impending initial public offering (IPO).
Birkenstock finalized the terms of the impending deal on Monday, October 2nd. F1A form Filed with the Securities and Exchange Commission (SEC). Birkenstock stock will cost between $44 and $49 each. At least 32 million shares will be floated, and the deal could raise up to $1.6 billion.
IPO is expected to start next week.
At the top of the price spectrum, Birkenstock has an initial market capitalization of $9.2 billion based on outstanding shares. On a fully diluted basis, this would amount to an additional $9.9 billion.
Birkenstock secretly filed for listing with the SEC in early July, without disclosing pricing terms, before filing an F-1 form on September 12.
Birkenstock’s current owner, L Catterton, plans to maintain an approximately 83% stake after the transaction closes. According to his prospectus, the proceeds from the IPO will be used to pay down debt.
Lead underwriters include Goldman Sachs, JPMorgan, Citigroup, HSBC and Morgan Stanley.
Birkenstock generated a profit of $165.42 million on revenue of $1.45 billion for the twelve months ended March 31, 2023.
Since current CEO Oliver Reichert took over as president in 2013, sales have nearly tripled in the past 10 years, with about 30 million pairs of sandals sold last year alone. The company is Total revenue was a whopping $644 million. In the six months to March 31, sales were up almost 20% year-on-year. However, net income fell 45% to $40 million, hurting profit margins, due in part to higher wages and the weaker US dollar.
IPO go go…no?
Chip designer Arm announced last month – Largest scale in almost 2 years – On Wall Street, expectations were high that the long-dormant IPO market would be revived and that the year-to-date rate of stock price growth in 2023 would be even higher. However, the initial vibrancy faded, Concerns about further interest rate hikes It has attracted investors.
Stock prices have fallen in recent weeks, and the benchmark S&P 500 index has also fallen. Approximately 5% in the past month. Cooling sentiment could make things slippery as Birkenstock tries to gain a foothold in its first foray into the market.
“Investor sentiment remains very sensitive, especially given the perception that high interest rates are here to stay,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. told Reuters.
“So, despite all the hype, Birkenstocks may end up being listed at or below the midpoint of their price range, despite their fanatical ambitions.”
The path through the public markets can be a slippery one for shoe manufacturers.As a columnist for the Financial Times John Gapper points out, German Dr. Martens, which also features orthopedic soles, has been depreciating in value since its debut two years ago. Meanwhile, Crocs, which is also known for valuing comfort over style, has fallen sharply this year, even as investors bought them en masse during the pandemic.
Investors need to assess whether Birkenstock will suffer a similar fate, how deep a foothold it can secure in the market, and how the current market mood will impact the stock’s performance on its first day of trading. There will be.
