Contents
Birkenstock Holding Ltd, the renowned German premium footwear company, has garnered solid commitments from investors. Thus, positioning its U.S. initial public offering (IPO) to be priced at the upper limit of its suggested range, with an eye on achieving a substantial $10 billion valuation.
According to insider sources, the final decision regarding the IPO pricing, within the $44 to $49 per-share range, is set to be made on Tuesday. Just ahead of the company’s shares making their debut on the New York Stock Exchange on Wednesday.
Investor Commitments Total $1.58 Billion
Should Birkenstock proceed with pricing at the high end of the range, it is expected to raise an impressive $1.58 billion in funds. While these developments are promising, it’s essential to note that deliberations remain fluid, and anonymity is maintained due to the confidential nature of the matter. When approached for comment, Birkenstock declined to provide any official statement.
Fourth Major IPO in a Month
Birkenstock’s IPO comes as the fourth major company to go public in the United States within the past month. Following in the footsteps of chip maker Arm Holdings Plc, grocery delivery app Instacart, and marketing automation platform Klaviyo, all of which priced their IPOs at or above the upper end of their initial ranges, experiencing a surge in share prices upon debut.
Read More: Metro Bank’s Rejection of Shawbrook Takeover Bids
Birkenstock Conservative Approach
Despite robust initial investor demand, Birkenstock appears cautious about adjusting its IPO price range upward. This cautious stance is possibly due to the mixed post-IPO performances of recent market entrants. While Arm and Klaviyo’s stock continues to trade above their IPO prices, Instacart’s stock currently values less than its initial offering.
Birkenstock’s Competitive Valuation
Birkenstock is already seeking a valuation higher than some of its larger footwear counterparts. At the upper end of its range, its valuation would stand at roughly 27 times trailing 12-month earnings before interest, taxes, depreciation, and amortization, while Nike Inc trades at a comparatively modest 21 times.
Strong Investor Interest
In preparation for its IPO, Birkenstock initiated a roadshow last week, generating significant investor interest. Financière Agache has expressed interest in acquiring $325 million worth of shares. While Durable Capital Partners LP and Norges Bank Investment Management have indicated a combined interest in $300 million worth of shares. As disclosed by Birkenstock in a recent filing.
Birkenstock: A Legacy Brand
Established in 1774 in the German village of Langen-Bergheim by Johannes Birkenstock and his younger brother Johann Adam Birkenstock. Both skilled shoemakers, Birkenstock has remained a family business for six generations. Over the years, the brand has successfully transitioned into a fashionable item, endorsed by models and celebrities. Most notably, Margot Robbie sported a pink pair of Birkenstocks in a scene from a recent summer movie.
L Catterton’s Majority Stake
In 2021, L Catterton, a private equity group backed by French billionaire Bernard Arnault. And luxury goods empire Louis Vuitton Moet Hennessy, acquired a majority stake in Birkenstock. Following the IPO, L Catterton is set to hold an 82.8% stake in Birkenstock. Thus, wield a majority of the combined voting power of its outstanding shares.
Do you need help in finding the best forex broker for your needs?
Click here: The Best Forex Broker Finder
