Puig, Backers to Raise €2.6 Billion in Madrid IPO

"Puig Brands SA Launches €2.6 Billion IPO, Europe's Largest of the Year, Riding the Wave of Regional Equity Market Growth"

Puig and its founding family have outlined plans to offer Class B shares at a price range of €22 to €24.50 per share, as disclosed in a filing with the Spanish securities regulator on Thursday.

Should the offering proceed as planned, Puig, headquartered in Barcelona and renowned for its portfolio of brands including Jean Paul Gaultier, Rabanne, and Carolina Herrera, could attain a market valuation of up to €13.9 billion, based on terms obtained by Bloomberg.

As part of the IPO, Puig intends to issue new shares with the aim of generating €1.25 billion in proceeds, while the Puig family seeks to raise €1.36 billion by offering their own stock. The final number of shares to be issued will be contingent upon the eventual IPO price.

In terms of dollar value, this listing eclipses Galderma Group AG's recent 2.3 billion Swiss-franc ($2.6 billion) sale, positioning it as Europe's largest IPO thus far in the year.

Puig, alongside its founding family, has unveiled plans to offer Class B shares priced between €22 to €24.50 each, as disclosed in a filing with the Spanish securities regulator on Thursday.

With renowned brands such as Jean Paul Gaultier, Rabanne, and Carolina Herrera under its umbrella, Puig anticipates a potential market valuation of up to €13.9 billion following the offering, according to terms reviewed by Bloomberg.

In a bid to bolster its financial standing, Puig aims to issue sufficient new shares to yield €1.25 billion in proceeds, while the Puig family seeks to raise €1.36 billion through the offering of their own stock. The total number of shares issued will be contingent upon the final IPO price.

In dollar terms, this listing eclipses Galderma Group AG’s recent 2.3 billion Swiss-franc ($2.6 billion) sale, making it Europe’s largest IPO thus far this year.

Should Puig's offering prove successful, it is poised to pave the way for further listings in the market. Year-to-date, European IPOs have totaled $7.5 billion, marking an 88 percent increase from the same period last year.

However, recent stock market debuts have yielded mixed results. While Galderma's shares have surged since its listing, German perfume retailer Douglas AG has experienced a decline.

The upcoming Puig listing is anticipated to draw significant attention from Spanish contenders eyeing a float, including clothing retailer Tendam and Hotelbeds, the latter of which reportedly delayed its IPO until after the summer. Elsewhere in Europe, private equity firm CVC Capital Partners is gearing up for an offering in Amsterdam.

Family Business

Founded in 1914 by Antonio Puig as a perfume company, Puig experienced significant growth throughout the 20th century primarily through the distribution of renowned foreign goods from companies like Max Factor and the production of perfumes under license for various brands.

In recent years, Puig has shifted its focus towards niche brands, exemplified by acquisitions such as L’Artisan Parfumeur, Penhaligon’s, and Byredo, as well as the launch of designer Dries Van Noten’s perfume line. Additionally, Puig owns the beauty brand Charlotte Tilbury.

Despite its evolution, Puig remains under the leadership of the third generation of the founding family. Marc Puig Guasch serves as Chairman and Chief Executive Officer, while his cousin Manuel Puig Rocha holds the position of Vice Chairman. Notably, the family retains a majority stake in the company and will continue to hold "the vast majority of the voting rights," as announced by Puig on April 8th.

Puig reported a notable revenue increase of 19 percent last year, amounting to €4.3 billion. The makeup segment, although smaller in comparison to fragrances and fashion, experienced a remarkable 23 percent growth. Moreover, the company's profit margin saw an improvement, rising to 20 percent last year from 17.7 percent in 2021.

However, Puig's decision to pursue an IPO comes at a time when competitors have signaled a potential slowdown in consumer demand for beauty products. Ulta Beauty Inc. witnessed a significant decline in shares on April 3rd after executives indicated a deceleration in demand, impacting the shares of other industry peers as well.

The share sale for Puig is scheduled to commence on Friday and will continue until April 30th. The first day of trading is slated for May 3rd on the Madrid Stock Exchange, with the company trading under the symbol PUIG, as per the terms outlined.

Puig officially announced its intention to list on April 8th, specifying the amount the company aimed to raise through the IPO.

Leading the IPO are Goldman Sachs Group Inc. and JPMorgan Chase & Co., while Bank of America Corp., BNP Paribas SA, CaixaBank SA, and Banco Santander SA are serving as joint bookrunners for the offering. These prominent financial institutions will play integral roles in facilitating the share sale and ensuring its success on the market.

Source: businessoffashion‍