Dr Martens IPO size expected to be higher than GBP 1bn – sources

22 January 2021

Dr Martens Airwair Group’s planned London IPO is on course for a deal size of more than GBP 1bn, two sources familiar with the situation told this news service.

 

Permira, which owns the UK-based cobbler, is aiming for at least 25% free float plus an expected 15% over-allotment option in the all-secondary deal according to the ITF announcement earlier this week.

 

The company could look to premium brands like Canada Goose [TSE:GOOS] and Moncler [BIT:MONC] as valuation comparables, a sector banker and one of the sources said. Prada [HKG:1913] is also a peer because of its market position, a second sector banker said. Permira has done well to turn Dr Martens from an alternative mark to high fashion, the second banker said.

 

Footwear firm VF Corporation [NYSE:VFC] is also among its comparables, the second sector banker and a third source familiar with the situation said. The third source added Nike [NYSE:NKE], which owns the similar mark Converse, among those in the shoe space being pitched as peers to the buyside.

 

Dr Martens should fetch more than 15x EV/EBITDA, both sector bankers said.

 

The company reported GBP 184.5m EBITDA for the twelve months to 31 March 2020 according to its EITF announcement last week.

 

The process is “pretty well supported” with “a lot of anchor demand”, the first source said. Investors are keen on the company’s margins, brand recognition and growth prospects, he said. Its equity story is boosted by the brand’s profile in Asia and its consequent growth prospects there, the first sector banker agreed.

 

Goldman Sachs and Morgan Stanley are joint global coordinators on the IPO, while BarclaysHSBCBofA and RBC are bookrunners, and Lazard is advising the company, as reported.

 

Permira and Dr Martens declined to comment.

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