Shares of Dr. Martens won’t officially float on the London Stock Exchange until Wednesday, but the boot brand has already priced at the high end of expectations.
On Friday, shares of the British footwear firm were priced between 3.3 to 3.7 pounds ($4.52 to $5.07), pushing valuation at the high end to 3.7 billion pounds ($5.07 billion). The offer was oversubscribed at 8 times, and an over-allotment option for the sale of an additional 52.5 million shares is expected to be exercised, which would result in a raise of 1.5 billion pounds ($2.06 billion) for the shares sold at 3.7 pounds a share. Conditional trading began on Friday for institutional investors who were allocated shares. Existing shareholders are selling 350 million shares.
Permira owns a 75 percent stake in the brand, worth about 970 million pounds ($1.34 billion). It said Friday that it would retain a 42.9 percent stake based on the exercise of the overallotment option in full. The private equity firm acquired the brand from the Griggs family for 300 million pounds ($398 million) in a deal that closed in 2014. The Griggs family retained about a 10 percent stake in the company, which is valued at 129 million pounds ($1.77 billion).
“Over the last seven years, Dr. Martens has transformed from a manufacturing-oriented wholesale business to a multi-channel, consumer-first, digital-led business—all while remaining loyal to its original values of empowering rebellious self-expression,” Permira said of the transformation of the brand under its stewardship. “The clear strategic roadmap, led by Kenny Wilson, CEO, together with a strong senior management team has delivered significant value.”
The private equity firm said that over the term of its investment, revenues at Dr. Martens more than tripled, growing from 209 million pounds ($286.5 million) in 2014 to 672 million pounds ($921.0 million) in 2020. “Investment in the Company’s e-commerce platform has driven strong online growth from 7 percent of revenues at entry to 20 percent in 2020,” Permira said, adding that the brand has also grown its staff, tripling from 758 in March 2014 to 2,288 in March 2020.
“Dr Martens has always been an undisputed global icon, a brand like no other, inspiring deep engagement and passion in consumers from all walks of life for over six decades. During the past seven years, the brand has been transformed in scale and professionalism, making Dr Martens one of the most successful single-brand businesses in the world,” Tara Alhadeff, a partner at Permira, said. “The strategy has always been to run this brand for the next six decades, which has meant making considerable investments in people and operations, as well as always putting consumers and the brand at the heart of the business. We are excited to continue supporting Kenny and the management team in Dr Martens’ growth trajectory.”
Dr. Martens reported in August that it sold 11.1 million pairs of shoes for the year ended March 31, and grew revenue 48 percent to 672.2 million pounds ($875 million). In addition to footwear, the 73-year-old company also sells accessories and apparel.