Birkenstock IPO Secures $10 Billion Valuation, Pricing Decision Pending
Birkenstock Holding Ltd, the German premium footwear company, has garnered enough investor commitments to price its U.S. initial public offering (IPO) at the top of its indicated range, potentially reaching a valuation of $10 billion, sources familiar with the matter revealed. The final decision on pricing the IPO at the upper end of the $44-to-$49-per-share range is expected to be made on Tuesday, with the company’s shares set to debut on the New York Stock Exchange on Wednesday.
Strong Investor Demand
If Birkenstock prices its IPO at the top end of the range, it could raise $1.58 billion. However, the sources cautioned that the deliberations are ongoing and requested anonymity due to the confidential nature of the matter. Birkenstock has declined to comment on the situation.
Despite the robust initial investor demand, Birkenstock is not inclined to raise its IPO price range, likely due to recent market trends. Chip maker Arm Holdings, grocery delivery app Instacart, and marketing automation platform Klaviyo, which all launched IPOs in the past month, priced their offerings at the top or above their indicated range. While their shares initially rallied, they subsequently experienced a decline in value. Arm and Klaviyo continue to trade above their IPO price, whereas Instacart’s stock is now worth less than its IPO value.
Birkenstock’s Current Valuation
Birkenstock is already seeking a valuation that is higher than some major shoe brands. At the top of its range, Birkenstock would be worth approximately 27 times its trailing 12-month earnings before interest, taxes, depreciation, and amortization. In comparison, Nike Inc trades at 21 times its earnings.
Investor Commitments
Leading up to the IPO, Birkenstock initiated a roadshow last week, during which it garnered interest from several investors. Financière Agache has indicated a potential purchase of $325 million worth of shares, while Durable Capital Partners LP and Norges Bank Investment Management have shown interest in acquiring $300 million worth of shares, as disclosed in a filing by Birkenstock.
A Rich History and Celebrity Endorsements
Founded in 1774 by Johannes Birkenstock and his younger brother Johann Adam Birkenstock, both skilled shoemakers, Birkenstock has a long-standing tradition. The company remained under the Birkenstock family’s management for six generations. In recent years, Birkenstock has sought to position itself as a fashionable brand worn by models and celebrities. Notably, Margot Robbie’s character Barbie donned a pink pair of Birkenstocks in a movie released earlier this year.
Majority Stake Acquisition
In 2021, L Catterton, the 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 will hold an 82.8% stake in the company and control the majority of combined voting power of its outstanding shares.
As the pricing decision approaches, Birkenstock is poised to make a significant entrance into the U.S. stock market, with its IPO potentially securing a $10 billion valuation. Investors eagerly await the outcome, which will determine the company’s future trajectory and market performance.
