Puig needs to go public: Why it issues

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What occurred?

Puig introduced on Monday its intention to proceed with an preliminary public providing. The Spanish trend and wonder conglomerate intends to use for admission of the shares to itemizing on the Barcelona, Madrid, Bilbao and Valencia Inventory Exchanges. The IPO targets an fairness elevate of over €2.5 billion. Following the providing, the Puig household will retain a majority stake in addition to the overwhelming majority of voting rights.

Puig chairman and CEO Marc Puig referred to as the choice “a decisive step in Puig’s 110-year historical past”. “We strongly consider that constructing premium manufacturers requires long-term considering and having a household behind an organization fosters this long-term method, as a result of they have an inclination to care in equal measure concerning the time horizon of the following technology and the following quarter. On the similar time, it can be crucial for any household enterprise to have the suitable checks and balances in place, notably throughout generational transitions. We consider that the steadiness of being a family-owned firm that can be topic to market accountability will permit us to raised compete within the worldwide magnificence market throughout the subsequent part of the corporate’s growth,” the chief stated in a press release.

“Moreover, we consider that changing into a publicly listed firm will align our company construction with these of best-in-class, family-owned firms within the premium magnificence sector globally, assist us to draw and retain expertise, and assist the expansion technique of our manufacturers and portfolio,” he added.

Why does it matter?

Puig’s gross sales rose 19 per cent to €4.3 billion in 2023. Regardless of a robust efficiency, the corporate stays small in comparison with a few of its rivals (by comparability, LVMH gross sales had been up 13 per cent to €86.2 billion in 2023 and L’Oréal’s 2023 gross sales had been up 11 per cent to €41.18 billion).

In the previous couple of years, Puig’s launched into an acquisition streak. The corporate acquired Charlotte Tilbury in 2020 and Byredo in 2022. Each offers had been reportedly valued at roughly $1 billion, though Puig refuses to touch upon these figures. In an interview with Vogue Enterprise in 2023, Marc Puig defined the corporate’s determination to pause its M&A actions: “As a non-public firm, we will solely finance acquisitions with the sources we generate.” But, in January 2024, Puig introduced one other, albeit smaller, acquisition of Dr Barbara Sturm.

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