German company Birkenstock Holding Plc is preparing to launch its initial public offering (IPO) after the trading day concludes today. The IPO is projected to be priced at the top end of the range, between $44 and $49 per share, potentially raising up to $1.58 billion and valuing the company at around $9.2 billion. This comes amidst a string of notable listings in the US, including Arm Holdings Plc, Instacart, and Klaviyo Inc., which have broken a two-year drought of listings. However, the current market climate has introduced added volatility due to uncertainties like the looming US government shutdown and the Hamas attack on Israel.

The success of Birkenstock’s IPO is positioned as a test for the newly uncertain market. According to Bloomberg Intelligence analyst Abigail Gilmartin, the company stands out from its peers in the sector due to its strong profitability. This positive attribute may work in its favor and serve as a precedent for future IPOs, particularly for other profitable companies. Birkenstock has established itself as a high-fashion brand with strong appeal across generations, thanks to collaborations with luxury names such as Dior, Manolo Blahnik, and Valentino.

The IPO is expected to attract anchor investors to stabilize its listing. Bernard Arnault’s family holding company, which has already invested in Birkenstock, has the potential to purchase up to $325 million worth of shares. The Norwegian sovereign fund and Durable Capital Partners have also expressed interest in acquiring shares. Furthermore, approximately 8% of the listing’s shares have been set aside for employees at the IPO price.

Given the uncertainty surrounding a potential government shutdown, this could potentially be the final major US listing of the year. If the shutdown occurs, it may leave the US Securities and Exchange Commission with insufficient staff to handle IPO filings. Companies considering IPOs in the upcoming year are likely to look at Birkenstock’s performance as a determining factor. Various sectors already have numerous potential candidates, including activewear brand Vuori Inc., weight-loss drugmaker Carmot Therapeutics, and GameChange Solar.

Goldman Sachs, JPMorgan Chase, and Morgan Stanley will lead Birkenstock’s IPO, with the company’s shares expected to begin trading tomorrow on the New York Stock Exchange under the symbol BIRK. If successful, private equity firm L Catterton could potentially double its investment. L Catterton acquired Birkenstock for €4 billion ($4.2 billion) in an April 2021 deal that involved the Arnault company.

In summary, Birkenstock’s IPO is highly anticipated as it could provide insights into the health and stability of the post-pandemic IPO market. With its strong profitability and broad appeal, the company has the potential to perform well and set a positive tone for future listings.

Useful links:
1. Birkenstock Official Website
2. New York Stock Exchange