Britain’s biggest watch retailer, Watches of Switzerland Group, is considering an initial public offering in London as it seeks to reduce debt and make acquisitions.
The company, which markets brands such as Rolex, Richemont’s Cartier
and Swatch Group’s Omega, is looking to trade on the main market of the London Stock Exchange, using its premium listing segment.
The IPO would entail the sale of 25% new and existing shares, it said on Thursday. A premium listing meets rules more stringent than the EU’s minimum requirements.
The IPO could value the company at up to £1bn, or 12-15 times earnings before interest, tax, depreciation and amortisation, says an informed source.
But another source pointed to a more modest valuation of £600m-£800m for the company, which had revenue of £746m and ebitda of £67.7m at year-end in January 2019.
Owned by US private equity firm Apollo Global Management, Watches of Switzerland has 125 shops in Britain and several standalone stores in the US, including branches in Las Vegas and New York.
Watches of Switzerland Group said it accounted for half of all Rolex products sold in the UK in 2018.
“Today’s announcement signals the next stage in that journey, leveraging our scale, retail and e-commerce expertise, and strong stakeholder relationships to continue our profitable growth strategy,” said CEO Brian Duffy.
The global luxury watch market is a structurally attractive market, underpinned by favourable, long-term growth in price and volume.
Watches of Switzerland would join Middle Eastern payment firms Network International and Finablr to end a drought in the European IPO market, where proceeds fell to their lowest level in more than a decade in the first quarter of 2019, according to Refinitiv data.
Barclays and Goldman Sachs International are global co-ordinators on the deal, while BNP Paribas and Investec are acting as bookrunners and NM Rothschild is acting as financial adviser.
- Reuters
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