Birkenstock Holding, the German premium footwear company, is set to debut on the U.S. market with an initial public offering (IPO) that could value the company at $10 billion. According to sources, Birkenstock has received enough commitments from investors to price its IPO at the top of its indicated range, which is between $44 and $49 per share.
The final decision on the pricing will be made on Tuesday, and the shares are expected to begin trading in New York on Wednesday. At the top of the price range, Birkenstock would raise $1.58 billion. The sources caution that the deliberations are still ongoing and requested anonymity due to the confidentiality of the matter.
Birkenstock is the fourth major company to launch a U.S. IPO in the past four weeks, following the footsteps of Arm Holdings, Instacart, and Klaviyo. These companies also priced their IPOs at or above their indicated range and experienced a rally in share prices during the debut. However, the gains were short-lived, with most of them giving up their initial gains soon after.
The strong initial investor demand for Birkenstock’s IPO explains why the company is hesitant to raise its price range. Despite the high demand, Birkenstock is seeking a valuation that is higher than some bigger shoe brands. If priced at the top of the range, it would be valued at approximately 27 times its trailing 12-month earnings before interest, taxes, depreciation, and amortization (EBITDA), compared to Nike trading at 21 times.
To further solidify its IPO, Birkenstock launched its roadshow last week with certain investors already lined up. Financiere Agache has shown interest in buying $325 million worth of shares, while Durable Capital Partners and Norges Bank Investment Management have expressed interest in $300 million worth of shares. Additionally, Baron Funds, a growth equity investor, has placed an order for $500 million worth of shares after the roadshow started.
With these cornerstone investors and the order from Baron Funds, approximately $1.13 billion worth of stock is expected to be accounted for. This level of investor interest contributes to the anticipation surrounding Birkenstock’s IPO.
Birkenstock, originally founded in 1774 in Germany, has been working towards repositioning itself as a fashionable item worn by models and celebrities. The brand gained further recognition when Margot Robbie’s character Barbie wore a pink pair of Birkenstocks in the final scene of a movie released this summer.
L Catterton, the private equity group backed by French billionaire Bernard Arnault and luxury goods empire LVMH, acquired a majority stake in Birkenstock earlier this year. After the IPO, L Catterton will hold an 82.8% stake in the company and control a majority of the combined voting power of its outstanding shares.
The successful IPO of Birkenstock would mark another milestone for the company as it seeks to expand its brand and presence in the global market.