Private equity giant L Catterton is looking to the klieg lights of Wall Street — and a big valuation.
The company, which bought Birkenstock last year and has a long consumer track record, has hired banks for an initial public offering with the testing of the market suggesting a valuation of $3 billion to $4 billion, according to a source familiar with the process.
While a summer offering is possible, the timing is still up in the air given volatility in the markets, where investors are digesting Russian’s invasion of Ukraine and still working through all the pandemic fallout, from high inflation to massive shifts in the corporate landscape.
Wall Street saw a record IPO rush last year, with buzzy names across fashion jumping in, including Allbirds Inc., Warby Parker Inc., Olaplex Holdings Inc. and the L Catterton-backed The Honest Co.
Although the IPO market has cooled some this year, it is still clearly open for the big private equity players. Buyout specialist TPG Inc. made its debut in January.
Morgan Stanley is the lead underwriter on the L Catterton offering, which includes Goldman Sachs. The Wall Street Journal previously reported that L Catterton had hired the banks for an IPO.
WWD learned the offering will have a dual class structure, concentrating on voting rights, which would likely help the firm’s leadership keep control over its direction while allowing in more investors.
Spokespeople for L Catterton, Morgan Stanley and Goldman Sachs all declined comment.
In addition to raising money, the IPO will let the company easily structure deals that have a stock component, using its shares as a kind of currency.
Should it come to pass, L Catterton’s offering will give investors a new way to bet on the consumer world.
Led by global co-chief executive officers Scott Dahnke and J. Michael Chu, L Catterton has proven adept at following key themes in the consumer world, such as health and wellness, the growing focus on the environmental and sustainability, or technological change, into high-profile investments.
The L Catterton playbook typically involves buying into consumer businesses that figure into those themes and then using its expertise and connections to supercharge operations, eventually selling the business at a profit.
L Catterton is also a key bridge between high finance and high fashion.
The current iteration of L Catterton was formed in 2016 when consumer specialist Catterton joined forces with LVMH Moët Hennessy Louis Vuitton chief Bernard Arnault’s Groupe Arnault. The resulting company bills itself as “the largest, diversified consumer-dedicated private equity firm in the world.”
L Catterton’s investments, past and present, looks something like a map detailing the many facets of the consumer world and, in fashion, retail and beauty, includes: Ba&sh, Birkenstock, Bliss, Enjoy, Etro, Everlane, Gant, Gentle Monster, Halston Apparel Group Inc., Intercos, Peloton, Pepe Jeans, Rhone, Savage x Fenty, StriVectin Holdings, The Honest Co., ThirdLove and more.
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