2023-10-11 02:21:14
The health sandal manufacturer Birkenstock surprisingly did not fully exploit the price range for its IPO in New York. The 32.3 million papers would be allocated at $46, just below the middle of the range, which ranged from $44 to $49, the traditional company from Linz am Rhein announced on Tuesday evening. The Wall Street Journal (WSJ) had previously reported on it. Given the shaky markets, Birkenstock and its accompanying investment bankers decided to play it safe and set the price cautiously, even if demand would have made an issue price of $49 possible, insiders told the Reuters news agency.
The traditional company wants to make its debut on Wall Street on Wednesday. At the issue price, Birkenstock is valued at $8.6 billion. Including the shares from a management and employee share program, the figure is 9.3 billion. The company and its majority owner, financial investor L Catterton, will raise a total of $1.48 billion from the issue. Birkenstock itself will receive $495 million, which will be used to reduce debt. At least $989 million remains for L Catterton – if the share is well received on the stock market and the over-allotment option is exercised, even $1.22 billion.
The US financial investor, which is primarily backed by the French luxury group LVMH (Louis Vuitton Moet Hennessy), bought Birkenstock from the founding family two years ago for a valuation of more than four billion dollars. After the IPO, L Catterton still holds a good 80 percent. LVMH’s major shareholder, Bernard Arnault, one of the richest men in the world, is now joining Birkenstock directly. According to the prospectus, he has agreed to buy shares for $325 million.
Sales more than quadrupled
The company’s success is primarily due to CEO Oliver Reichert, who wants to ring the stock market bell on Wall Street on Wednesday. He has been with Birkenstock since 2009 and was the first non-family manager to take the top spot in 2013. Since he gave the health sandals a hip image and expanded the product range, sales have more than quadrupled. From 2020 to 2022 alone it rose by almost a third.
The largest market for Birkenstock is America. The company generates more than half of its sales there, and the trend is rising. According to bankers, this is also the most important reason for choosing New York as the stock exchange – even though Birkenstock produces 95 percent of its products in Germany.
The IPO is organized by the investment banks Goldman Sachs, JP Morgan and Morgan Stanley.
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In New York, Birkenstock is the fourth newcomer to the stock exchange in four weeks: after the chip designer Arm, the food delivery app Instacart and the marketing platform Klaviyo. Their shares had risen sharply at their stock market debut, but some of their gains were quickly lost again. In Frankfurt, only one of three candidates made it onto the stock exchange in the fall due to the weak economy and the turbulent markets: the pharmaceutical packaging manufacturer Schott Pharma. The Augsburg armored gear group Renk canceled its IPO shortly before the initial listing, and the fuel card provider DKV Mobility has postponed its issue until next year, according to insiders.
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