Birkenstock is looking to price the IPO at the top of the range, sources say

NEW YORK (Reuters) – Birkenstock Holding Inc (BIRK.N) has secured enough commitments from investors to price its U.S. initial public offering at the top of its specified range and obtain a valuation of $10 billion, according to people familiar with the matter. With the command.

The German luxury footwear company will make a final decision on pricing its initial public offering at the top of the range of $44 to $49 per share on Tuesday, before its shares debut in New York on Wednesday, the sources said.

Birkenstock will end up raising $1.58 billion at the top of the range.

The sources stressed that the deliberations were smooth and requested not to reveal their identity because the matter is confidential. Birkenstock declined to comment.

Birkenstock is the fourth major company to launch an initial public offering in the United States in the past four weeks, following the IPOs of chip maker Arm Holdings, grocery delivery app Instacart (CART.O) and marketing automation platform Klaviyo (KVYO.N).

They priced their IPOs at or above the specified range and saw their shares rise initially, only to give up most of the gains in the following days. While shares of Arm and Klaviyo are still trading above their IPO price, Instacart stock is now worth less than its IPO value.

This helps explain why Birkenstock has tended not to move up its IPO price range despite strong initial demand from investors.

It is already seeking a foamier rating than some major shoe brands. It would be worth about 27 times 12-month EBITDA at the high end of its range, when Nike stock is trading at 21 times.

In order to leave little to chance, Birkenstock launched its IPO roadshow last week with some investors lining up. Financiere Agache has indicated interest in buying $325 million worth of shares, while Duar Capital Partners and Norges Bank Investment Management have expressed interest in buying $300 million worth of shares, Birkenstock revealed in a filing.

Growth equity investor Baron Funds placed an order to buy shares worth $500 million after the roadshow began, the sources said. Nearly $1.13 billion worth of shares are expected to be accounted for between cornerstone investors and Barron’s, the sources said.

Birkenstock was founded in 1774 in the German village of Langen-Berkenheim by Johannes Birkenstock and his younger brother Johann Adam Birkenstock, both of whom were shoemakers. The Birkenstock family ran the company for six generations after its founding.

The brand seeks to emerge as a fashionable item worn by models and celebrities. Barbie, played by Margot Robbie, wore a pink pair of Birkenstocks in the final scene of the film released this summer.

L Catterton, the private equity group backed by French billionaire Bernard Arnault and luxury goods empire Louis Vuitton Moët Hennessy (LVMH.PA), acquired a majority stake in Birkenstock in 2021.

Following the IPO, L. Catterton will own an 82.8% stake in Birkenstock and control a majority of the combined voting power of its outstanding shares.

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