By Matthias Inverardi and Pablo Mayo Cerqueiro
DUSSELDORF/LONDON (Reuters) – German perfume retailer Douglas is considering going public in the first quarter of the year, people familiar with the matter told Reuters, in what could be one of the first major tests for European IPOs in 2024.
The private equity-backed company is set to release earnings encompassing the Christmas season in the coming weeks, with a view to listing on the Frankfurt Stock Exchange by March if market conditions allow, the people said.
The listing is set to give the CVC-owned retailer a valuation of up to 7 billion euros ($7.65 billion), one of the people said, speaking on condition of anonymity.
No final decision has been made on the timing and the IPO plans could be delayed, the people cautioned. Douglas declined to comment.
Proceeds from the IPO will be used to help pay down debt, the people said.
The company had 3.4 billion euros of net debt at the end of September, including store leases, equating to about 4.7 times its adjusted core earnings.
Under new CEO Sander van der Laan, Douglas posted a 12% rise in sales to more than 4 billion euros in the year to September 2023, with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of around 726 million euros.
Its listing would come after a quiet two years for initial public offerings, as soaring debt costs and geopolitical uncertainty dampened sentiment towards new stock listings.
Last year was the worst for global IPOs since 2009 with $120 billion raised, according to Dealogic data.
Yet, IPO bankers ended 2023 on a positive note, with the U.S. Federal Reserve signalling it may start reversing interest rates in the new year, which would be a boost to new listings.
Besides Douglas, bankers hope other European companies will come to the market this year and pave the way for a broader revival in deal activity, including Renault’s electric vehicle arm Ampere and Swiss skincare group Galderma.
($1 = 0.9145 euros)
(Reporting by Matthias Inverardi in Dusseldorf and Pablo Mayo Cerqueiro in London; Editing by Anousha Sakoui, Jan Harvey and Susan Fenton)