LONDON - Birkenstock Holding plc (NYSE:BIRK), a well-known global footwear brand, has initiated a secondary public offering of 14 million ordinary shares, according to an announcement made today. The shares are being offered by BK LC Lux MidCo S.à r.l., an affiliate of L Catterton, which is currently the largest shareholder of Birkenstock.
The company clarified that it will not be selling any shares nor will it receive any proceeds from this offering. The entity offering the shares holds sole voting and dispositive power over 9,880,814 shares and shared power over 4,119,186 shares with Birkenstock's executive officers and certain employees. Moreover, the selling shareholder plans to give underwriters a 30-day option to buy up to 2.1 million more ordinary shares.
Upon completion of the offering, without accounting for the additional shares underwriters might purchase, the selling shareholder will retain about 73.2% ownership of Birkenstock's ordinary shares. Proceeds from the sale of shares owned by executives and employees are intended to cover their tax obligations related to the company's IPO and to repay loans taken to finance their indirect interests in Birkenstock.
CEO Oliver Reichert commented on the offering's potential to attract long-term investors and enhance stock liquidity, while Michael Chu, Global Co-CEO of L Catterton, reaffirmed their long-term commitment to Birkenstock's growth. Goldman Sachs (NYSE:GS) & Co. LLC and J.P. Morgan are managing the offering as joint lead book-running managers.
The offering will be made through a prospectus, which is part of a registration statement filed with the U.S. Securities and Exchange Commission (SEC) but not yet effective. The selling of these securities cannot proceed until the registration statement is effective, and the offering's completion is subject to market conditions.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction where such an offer or sale would be unlawful. The information provided is based on a press release statement.
In other recent news, Birkenstock Holding plc has seen a flurry of analyst activity following strong financial performance. Deutsche Bank (ETR:DBKGn) resumed coverage on Birkenstock, bestowing a Buy rating with a price target of $70, citing the company's impressive industry margins and potential for sustained revenue growth. The bank also projected further upward revisions to Birkenstock's financial estimates throughout the year, propelled by strong demand across all regions.
Goldman Sachs adjusted its stance on Birkenstock, downgrading the stock from Buy to Neutral but increased the price target to $58, reflecting the company's robust earnings and free cash flow forecasts. Meanwhile, Stifel retained its Buy rating and increased its price target to $63, acknowledging Birkenstock's effective global brand strategy and its potential for further growth.
BMO Capital Markets, Baird, and Telsey Advisory Group also raised their price targets to $60, $65, and $63 respectively, all maintaining Outperform ratings. These adjustments were driven by Birkenstock's strong sales and earnings, leading to an upward revision of its annual guidance.
The company's expected revenues for the fiscal year 2024 are anticipated to be between €1.77 billion and €1.78 billion, with adjusted EBITDA projections set at €535 million to €545 million.
These are among the recent developments for Birkenstock, which has seen its shares become the focus of several analyst adjustments following strong financial performance.
InvestingPro Insights
As Birkenstock Holding plc (NYSE:BIRK) moves forward with its secondary public offering, investors are closely monitoring the company's financial health and market potential. According to InvestingPro data, Birkenstock's market capitalization stands at a robust $11.55 billion USD. The company's revenue growth over the last twelve months as of Q2 2024 has been impressive at 21.38%, reflecting a strong upward trajectory in sales.
Investors are also considering Birkenstock's gross profit margin, which is a significant 60.85% for the same period. This indicates the company's ability to maintain a substantial profit after accounting for the costs of goods sold, which is a positive sign for potential investors.
Still, the P/E ratio is on the higher side at 142.35, suggesting that the stock might be trading at a premium compared to earnings. This could be a point of consideration for value-focused investors, weighing the company's growth prospects against its current valuation.
In terms of InvestingPro Tips, analysts are optimistic about Birkenstock's financial future, with 6 analysts having revised their earnings upwards for the upcoming period, suggesting confidence in the company's ability to outperform. Moreover, Birkenstock's net income is expected to grow this year, which could further justify the current stock valuation and attract growth-oriented investors.
For those interested in gaining more insights and tips on Birkenstock, there are an additional 18 InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/BIRK. For a deeper analysis and to take advantage of these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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