‘Armor Sports’ preparing to be listed on the U.S. stock market, riding the IPO market recovery trend

Armor Sports, owned by Arc'teryx, Wilson, Salomon, etc., submitted a securities report on the 4th
Annual sales growth rate of 3% over the past three years, challenging IPO based on solid performance
Expert: “The 20 US IPO market is positive as the amount of funding increases significantly compared to the previous year”
Photo = Armor Sports Factory Outlet

Amer Sports, which owns Arc’teryx, Wilson, Salomon, and Louisville Slugger, is seeking listing on the New York Stock Exchange. It has been five years since it was acquired through a consortium led by China’s Anta Group in 2019. A year ago, Anta Group and investors began preliminary discussions on an IPO (initial public offering), but the IPO market was struggling at the time, so it ended up taking over a year. Attention is being paid to how Armor Sports, which has proven solid performance by recording an average annual growth rate of nearly 5% from 1 to last year, will perform in this year’s IPO.

Armor Sports, corporate value expected to reach up to $100 billion

According to foreign media reports such as Bloomberg News on the 4th (local time), Armor Sports submitted a securities report to the New York Exchange to apply for an IPO. Goldman Sachs, Bank of America (BofA), JP Morgan Chase, and Morgan Stanley were selected as major sales underwriters, and the number and price of public offering shares have not yet been determined. According to Bloomberg, Armor Sports’ corporate value is reported to be approximately 10 billion (approximately 13.149 trillion won). The company plans to raise more than 1 billion through the listing, and all of the funds raised will be used to repay outstanding shareholder loans.

Founded in Finland in 1950, Armor Sports owns major sports brands such as Arc’teryx, a luxury product in the mountaineering equipment industry, Wilson, loved by professional tennis players, and Salomon, which focuses on skiing and mountaineering equipment. It currently has branches in Helsinki, Finland, Munich, Germany, Krakow, Poland, and Shanghai, China, and has more than 10,000 employees.

Armor Sports is a company with strong recent growth in the global market. Sales in 2022 will be 3.5 billion (approximately KRW 4.6112 trillion), showing an average annual growth rate of nearly 20% from 2.4 billion in 2020. In particular, sales exceeded 3.1 billion by the third quarter of last year, recording a 30% growth rate compared to the previous year. The main market by country is definitely the Greater China market. Among regional sales in 2022, the Greater China region recorded 593 million (approximately KRW 781 billion), up 67.6% from the previous year, followed by the Asia Pacific region with 235.4 million, up 52.8%.

Armor Sports recently held an investment briefing and touted its accelerated growth in China. An Armor Sports official said, “We used key learnings from Anta to secure capabilities in the Greater China region, and as a result, we were able to significantly grow our business even when other companies were facing difficulties or downsizing.” He added, “Through our experience, we “We have a deep understanding of Chinese consumers and can provide premium products that match consumer preferences.”

U.S. IPO market trend since 2010, note: raised funds (bar graph), number of IPO items (line graph)/Source = Renaissance Capital

IPOs re-promoted amid recovery in the global IPO market

Armor Sports was acquired in 2019 by a consortium made up of Anta Group, China’s Lululemon founder Chip Wilson’s Anamered Investment, and Tencent Holdings. Anta Group is a wholesale corporation that owns the sales rights for the Italian clothing brand Fila in China, Hong Kong, Macau, and Singapore. Last year, it surpassed Adidas and became the second sports clothing company in China. In addition to Fila, Anta Group, which develops brands such as Descente and Kolon Sports in China, spent $5.6 billion (approximately 7.36 trillion won) to acquire a 53% stake in Armor Sports at the time.

In January last year, Anta Group and its co-investors, which hold shares in Armor Sports, began preliminary discussions with several investment banks for Armor Sports’ IPO. However, as the IPO market continued to struggle at the time, it was decided to move forward this year. As the U.S. Federal Reserve (Fed) is expected to cut interest rates this year, it is interpreted that the odds of winning are higher than a year ago.

Looking at the recent atmosphere of the U.S. IPO market, Armor Sports’ judgment appears to be correct to some extent. According to the ‘2023 U.S. IPO Market Review’ recently announced by Renaissance Capital, a global financial institution, there will be 107 new listings (excluding SPAC listings and small-scale listings) in 2023, with a total of 19.4 billion (approximately 25 trillion won) in funding raised. This is a 150% increase in the amount of financing compared to 2022, when 72 stocks totaled 7.7 billion. In relation to this, Renaissance Capital CEO Bill Smith said, “The U.S. IPO market has been rebuilding since hitting a historic low in 2022, with ARM Holdings’ Nasdaq listing deal in September last year recording 4.871 billion, the 17th largest deal in history. “If the U.S. central bank changes its monetary policy as much as the market expects this year, more funds than expected will flow into the IPO market,” he predicted.

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