Amer Sports targets estimated IPO valuation of approximately $8.7 billion
Going Public: Amer Sports Aims to Raise Up to $1.8 Billion
Helsinki-based Amer Sports is gunning for big bucks with its initial public offering (IPO)—up to a whopping $1.8 billion, to be exact! The company, known for its diverse portfolio of around a dozen sports and outdoor brands such as Wilson, Atomic, Arc'teryx, and Peak Performance, is planning to sell 100 million shares, with a price range between $16 and $18 per share.
The high-end of this range sets the company's valuation at an impressive $8.7 billion. Goldman Sachs, Bank of America Securities, J.P. Morgan, and Morgan Stanley are among the joint book-running managers for this proposed offering. The group of underwriters includes 21 esteemed institutions, including Wells Fargo, Citigroup, UBS Investment Bank, and Deutsche Bank Securities.
Amer Sports anticipates generating $1.6 billion in proceeds if the IPO price settles at the $17 midpoint of the range. Three of the company's current investors—Anta Sports, Anamered Investments, and Tencent Holdings—have shown interest in purchasing up to $510 million worth of shares at the IPO price, per the securities filing.
tracing back its roots to 1950, Amer Sports was purchased by an investor group led by China-based Anta Sports in 2019 in a deal worth $5.2 billion. The company intends to utilize the net IPO proceeds to pay off all outstanding borrowings under its existing shareholder loans, with any remaining funds going toward repaying a portion of the outstanding borrowings under a revolving credit facility. Amer Sports will then grace the New York Stock Exchange under the stock symbol "AS."
Amer Sports boasts $2.1 billion in outstanding borrowings on its senior credit facilities as of Sept. 30, with variable interest rates attached. The company expects that increasing market interest rates could lead to additional interest payments, impacting its cash flow.
Amer Sports first announced its IPO plans earlier this month, but the share price was kept under wraps at the time. The company reported $3.5 billion in revenue in 2022, a notable uptick from $2.4 billion in 2020, according to the filing. For the nine months ended in September, revenue jumped nearly 30% to $3.1 billion from $2.4 billion the prior year, but the company's net loss widened to $113.9 million, up from $104.4 million.
Across the three months ending Sept. 30, Amer Sports reported wholesale revenue of $812.5 million, retail revenue of $183.4 million, and e-commerce revenue of $150.4 million.
Overall, an IPO can help a company achieve several strategic goals, including debt reduction, investment in growth, strategic acquisitions, and strengthening credit metrics [1][2]. Without more specific details from Amer Sports, it's sensible to infer that the proceeds may be utilized for a combination of these purposes, based on the company's strategic priorities.
- According to the filing, three of Amer Sports' current investors, Anta Sports, Anamered Investments, and Tencent Holdings, have shown interest in purchasing up to $510 million worth of shares at the IPO price on Monday.
- Following the IPO, Amer Sports plans to utilize the net proceeds to pay off all outstanding borrowings under its existing shareholder loans, with any remaining funds going toward repaying a portion of the outstanding borrowings under a revolving credit facility.
- Upon being listed on the New York Stock Exchange, Amer Sports will be trading under the stock symbol "AS."
- Additionally, the increase in market interest rates might lead to additional interest payments, potentially impacting Amer Sports' cash flow.
