The renowned German footwear brand, Birkenstock, famed for its enduring comfort and style, has officially priced its initial public offering (IPO) at $46 per share. This strategic move places the company’s estimated valuation at an impressive $8.64 billion. Although slightly below the midpoint of the anticipated range of $44 to $49 per share, the valuation surpasses that of Crocs and aligns with the market cap of the Swiss shoe brand On Running.
The Numbers
Initially aiming for a valuation of up to $9.2 billion, Birkenstock planned to issue approximately 10.75 million ordinary shares in its IPO, potentially raising around $495 million upon its debut on the New York Stock Exchange under the ticker symbol “BIRK.” With additional shares from selling stockholders amounting to 21.51 million, the total offering has the potential to generate approximately $1.48 billion.
This milestone comes amidst a somewhat unpredictable IPO market, with recent debuts such as Instacart, Kenvue (a Johnson & Johnson spinoff), and Oddity Tech experiencing varying degrees of success. Instacart, for instance, initially priced at $30 per share but faced challenges, closing at $33.70 after a modest initial surge.
Birkenstock’s decision to go public follows its acquisition by private equity firm L Catterton approximately two years ago, at a valuation of $4.85 billion. The move is seen as a strategic effort to enhance its valuation and gain access to capital markets, with plans to utilize the IPO proceeds to settle outstanding loans, as outlined in securities filings.
Jim Cramer takes a closer look at the IPO market as Birkenstock gets set to go public this week
Barbie Movie Appearance
The brand, with roots tracing back to 1774, recently garnered attention with its cameo appearance in the “Barbie” movie. Despite challenges in the footwear sector, including a slowdown in consumer spending and a shift towards services over goods, Birkenstock’s growth remains noteworthy. Between fiscal years 2020 and 2022, the company experienced a substantial increase in sales from 728 million euros ($771 million) to 1.24 billion euros ($1.32 billion). This growth was attributed to a strategic focus on direct-to-consumer initiatives, the strategic exit from certain wholesale partnerships in key markets, and an emphasis on high-value product sales.
In fiscal 2022, the company reported a net income of approximately 187 million euros ($198 million). With this successful IPO, Birkenstock aims to not only solidify its market position but also navigate the evolving landscape of consumer preferences and capitalize on its rich legacy in the footwear industry.
