German premium footwear company Birkenstock Holding Ltd is expected to price its U.S. initial public offering (IPO) at the high end of its indicated range, which would value the company at $10 billion. This decision comes after receiving enough commitments from investors. The final decision on pricing is anticipated on Tuesday, with shares set to debut in New York on Wednesday.

If Birkenstock prices its IPO at the top of the $44-to-$49-per-share range, it would raise $1.58 billion. However, it’s important to note that these plans are subject to change, and anonymous sources have revealed this information due to the confidential nature of the matter.

Birkenstock is the fourth major company to launch a U.S. IPO within the last four weeks, joining the likes of Arm Holdings Plc, Instacart, and Klaviyo. Similar to these companies, Birkenstock aims to price its IPO at or above the indicated range. However, while Arm and Klaviyo’s shares have maintained their value, Instacart’s stock is currently worth less than its IPO value.

Despite strong initial investor demand, Birkenstock is not considering raising its IPO price range. The company already seeks a valuation that surpasses some larger shoe brands, with a price-to-earnings ratio of 27 times trailing 12-month EBITDA, compared to Nike Inc’s ratio of 21 times.

To ensure a successful IPO, Birkenstock initiated its roadshow last week and has already garnered interest from potential investors. Financière Agache has expressed interest in purchasing $325 million worth of shares, while Durable Capital Partners LP and Norges Bank Investment Management have shown interest in $300 million worth of shares, according to Birkenstock’s filing.

Established in 1774 by Johannes Birkenstock and Johann Adam Birkenstock, the German brand has been handed down through six generations of the Birkenstock family. In recent years, the company has aimed to position itself as a fashionable item worn by models and celebrities. The brand received significant attention when Margot Robbie sported a pink pair of Birkenstocks in the final scene of a movie released this summer.

Birkenstock gained recognition in 2021 when L Catterton, the private equity group backed by French billionaire Bernard Arnault and luxury goods empire Louis Vuitton Moet Hennessy, acquired a majority stake in the company. After the IPO, L Catterton will hold an 82.8% stake in Birkenstock and control a majority of the combined voting power of its outstanding shares.

As Birkenstock prepares to enter the public market, all eyes are on the company’s IPO pricing decision and its potential for long-term success as a publicly traded entity.

Useful links:
1. [Birkenstock’s U.S. IPO Valuation Above $10 Billion]
2. [Private equity group L Catterton acquires majority stake in Birkenstock]