Birkenstock Holding is set to list its U.S. initial public offering at $46 a share, slightly below the midpoint of its projected range between $44 and $49. The stock is set to begin trading Wednesday morning at the open of the New York Stock Exchange under the symbol BIRK.
The stock began trading at $41, down about 11 percent from its IPO price, and remains at the level in mid-afternoon trading.
The pricing of the offering, as initially reported by the Wall Street Journal, is slightly below some expectations.
A Reuters report from October 2 indicated that Birkenstock and its underwriters were looking to price the offering at the high end of its indicated price range due to strong demand to reach a valuation of $10 billion. However, sources told Reuters Tuesday evening that Birkenstock chose to price the offering conservatively given market volatility.
At a price of $46 a share, the German company, best known for its broad-strapped leather sandals befitting monks and moguls alike, earns a valuation of $8.8 billion. Birkenstock will have 187.8 million shares outstanding.
As part of the offering, Birkenstock itself is selling 10.8 million shares and selling shareholders are selling 21.5 million shares.
At the IPO price of $46, Birkenstock will raise about $500 million, before underwriting expenses that are expected to amount to about $50 million.
According to Birkenstock’s prospectus filed with the Securities & Exchange Commission, Birkenstock said the “principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our ordinary shares and facilitate our future access to the capital markets.”
Birkenstock intends to use the proceeds it receives to repay approximately €100 million ($106 mm) under its loan agreement with AB-Beteiligungs GmbH and approximately €313 million ($332 mm) in aggregate principal amount of borrowings outstanding under its senior term facilities.
Selling shareholders will net around $990 million before underwriting expenses. The selling shareholders are entities affiliated with L Catterton, the private equity firm owned by French luxury giant LVMH. L Catterton, which will retain an 80 percent stake in Birkenstock post-closing, acquired a majority stake in Birkenstock in 2021 in a deal that reportedly valued Birkenstock at €4 billion (about $4.8 billion).
Underwriters have the option to purchase up to 4.8 million more shares from the selling shareholders to cover overallotments
Goldman Sachs, JPMorgan and Morgan Stanley are the lead underwriters in a team of 22 banks working on the deal.
Photo courtesy Birkenstock
