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Amer Sports' IPO market test

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Jan 31, 2024
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Illustration: Sarah Grillo/Axios

Amer Sports, the first major consumer company set to go public this year, will be a bellwether for private equity-backed companies.

Driving the news: The Finnish company — whose brands include Wilson, Salomon and Arc'teryx — is seeking up to $1.8 billion.

  • The IPO is set to trade Thursday, per Bloomberg.
  • The high end of its range would imply a valuation of around $8.7 billion.

Zoom in: Amer has seen losses in the past three years but is profitable on an adjusted EBITDA basis. The company has just over $2 billion in debt.

What they're saying: IPO investors remain focused on clean cap tables with less debt and solid profitability, says Gibson Dunn partner Peter Wardle.

  • An IPO will help Amer pay down its debt, Wardle says.
  • Plus, the company has several cornerstone investors and three of its current investors are committing another $510 million.
  • "That really helps, instead of having selling stockholders that are actually trying to get some liquidity and lessen their position," he says.

Between the lines: Kris Tuttle of IPO Candy has a less optimistic outlook, noting that while Amer tapped into the obvious growth levers of DTC and China, the push hasn't significantly expanded margins and operating earnings.

  • "Given the size of the deal and chorus of banks, I expect this deal to 'work' and could even trade well if (and only if) investors buy into the story that the company will meaningfully expand operating margins," Tuttle writes.

Of note: When Birkenstock (NYSE: BIRK) went public, it was in the black on a GAAP and adjusted basis and had €1.41 billion in debt as of June 30, 2023. Its shares are above its IPO price of $46.

  • Instacart (NAS: CART) posted a profit in the year ended Dec. 31, 2022. Its shares are down slightly.

The bottom line: Amer's brands are household names, which is something that can get investors excited, Wardle says.

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