Golden Goose Group SpA, together with its shareholders, is gearing up to raise approximately €558 million, about $600 million, through an initial public offering (IPO) of its luxury sneaker brand. This move is not just a significant milestone for Golden Goose but also represents a noteworthy event in the broader context of Europe’s resurging IPO market. The luxury sneaker market has been growing rapidly, and Golden Goose has established itself as a key player with its unique designs and high-quality products. This IPO is expected to attract substantial interest from investors who are keen on capitalizing on the brand's strong market position and growth potential. The decision to go public reflects the company's confidence in its business model and its strategic vision for future growth.
The company, along with its owner, private equity firm Permira, has outlined plans to sell approximately 30% of its share capital. The shares are expected to be priced between €9.50 and €10.50 each, according to a recent statement. This pricing range indicates a strategic effort to balance attractive valuation with market conditions to ensure a successful IPO. The anticipated sale will mark the largest IPO in Milan since the €599 million sale by gambling company Lottomatica SpA in May of the previous year. This move underscores Golden Goose's significant market presence and the high expectations surrounding its public offering. The sale is poised to give Golden Goose an implied market value estimated between €1.7 billion and €1.9 billion, showcasing the company's substantial financial strength and investor appeal. This valuation reflects Golden Goose’s robust brand equity, strong financial performance, and the positive outlook for the luxury sneaker market.
Bloomberg News had earlier reported that Golden Goose could potentially be valued at approximately €3 billion, inclusive of net debt. This higher valuation suggests that market analysts and investors are highly optimistic about the company's growth prospects and financial health. The inclusion of net debt in this valuation indicates a comprehensive assessment of the company’s overall financial position, taking into account its liabilities alongside its assets. This potential valuation highlights Golden Goose's significant market capitalization and underscores the strategic importance of this IPO in the company’s growth trajectory. The valuation also reflects the market's confidence in Golden Goose's ability to leverage its brand strength and operational capabilities to generate sustainable growth.
Golden Goose is planning to issue about 10 million new shares as part of this offering. Additionally, Permira, the private equity firm that owns Golden Goose, may sell as many as 43.6 million existing shares at the upper end of the price range. This dual approach of issuing new shares and selling existing shares indicates a strategic move to both raise capital and allow Permira to realize some of its investment. Invesco Advisers Inc. has agreed to take on the role of cornerstone investor, committing to a €100 million stake at the final price. This significant investment from Invesco serves as a strong endorsement of Golden Goose’s value proposition and market potential. The cornerstone investment is a crucial element in ensuring the success of the IPO, providing a substantial financial backing that can attract other investors. It reflects Invesco’s confidence in Golden Goose’s business model and growth prospects.
If there is sufficient demand to allocate additional shares under the so-called green shoe option, the deal size could increase to approximately €642 million. The green shoe option, which allows for the sale of additional shares if there is high demand, is a common practice in IPOs to stabilize the share price and provide additional funding. This potential increase in deal size underscores the strong investor interest and the robust demand expected for Golden Goose shares. The green shoe option provides flexibility and ensures that the company can maximize its capital raising efforts if market conditions are favorable. It reflects the company’s strategic planning and its ability to adapt to market dynamics to achieve its financial objectives.
Golden Goose’s IPO marks its entry into the European market alongside other major players such as the buyout giant CVC Capital Partners Plc and Spanish beauty group Puig Brands SA. These companies are moving forward with their listing plans, buoyed by the stock market’s rally to record highs. The resurgence of the IPO market in Europe is a positive sign for companies looking to go public, providing them with an opportunity to raise capital and expand their operations. IPO volumes had significantly declined in 2022 and 2023 as central banks raised interest rates to combat inflation, which in turn dampened investors’ appetite for risk. The recent market rally, however, has rekindled investor interest, creating a more favorable environment for IPOs. The entry of Golden Goose and other prominent companies into the public market reflects the growing confidence in the economic recovery and the favorable market conditions.
Golden Goose intends to utilize the proceeds from the IPO primarily to reduce its debt. This strategic move will strengthen the company’s financial position and provide it with greater flexibility to invest in growth initiatives. Reducing debt is a crucial step in improving the company’s financial health and enhancing its ability to generate sustainable profits. The company has set ambitious targets, aiming to achieve net sales of around €1 billion by the year 2029, up from €587 million recorded in the previous year. This growth target reflects the company’s confidence in its business model and its strategic vision for future expansion. Achieving this target will require a strong focus on innovation, market expansion, and operational excellence. The IPO proceeds will play a key role in supporting these initiatives, providing the necessary capital to invest in growth opportunities and drive long-term success.
The offering is being arranged by a consortium of financial institutions, including Bank of America Corp., JPMorgan Chase & Co., Mediobanca SpA, and UBS Group AG. These institutions bring extensive experience and expertise in managing large IPOs, ensuring that the offering is executed smoothly and successfully. Their involvement underscores the significance of this IPO and the high level of confidence in Golden Goose’s market potential. The consortium will play a crucial role in marketing the shares to potential investors, providing strategic advice, and ensuring regulatory compliance. Their participation reflects the strong market interest and the robust demand expected for Golden Goose shares. This collaboration with leading financial institutions highlights the strategic importance of this IPO in Golden Goose’s growth trajectory and its commitment to achieving its financial objectives.
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11.06.2024
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