Birkenstock sold to LVMH-backed group in €4bn deal
L Catterton and Bernard Arnault’s family office to buy German footwear group
L Catterton, the private equity firm backed by Bernard Arnault’s LVMH, has agreed to buy the German footwear group Birkenstock in a deal that values the company at about €4bn.
The sale will see the family-owned company, which traces its roots to 1774, pass into private equity ownership for the first time. Its owners Christian and Alex Birkenstock will keep a minority stake, said people familiar with the matter.
Financière Agache, Arnault’s family office, will also invest in the deal alongside L Catterton, a consumer-focused buyout group that has previously invested in the ecommerce group Everlane, the Peloton indoor cycling group and Build-A-Bear Workshop.
“In L Catterton and Financière Agache we have found not just shareholders, but also partners for achieving our global growth ambitions,” said Oliver Reichert, who alongside Markus Bensberg became Birkenstock’s first chief executive from outside the family in 2012. “They have a great deal of knowhow and excellent access to international markets.”
L Catterton, formed when LVMH and Arnault’s family holding company joined forces with the US private equity firm Catterton in 2016, beat competition from CVC Capital Partners to secure the deal. Permira, the buyout group that listed Dr Martens on the stock exchange last month, had also expressed interest.
The company’s new owners will pursue growth in China and India, and will expand its ecommerce and direct-to-consumer business, Birkenstock said in a statement.
It said the company had a “record year” despite the coronavirus pandemic in which “many companies in the sector have suffered”. Financial results for 2020 have not yet been published, but a spokesman for the group said revenues in the year to September 2020 were in line with the €721.5m it made the previous year, despite factory closures during lockdowns.
The company employs 3,800 people and made €129m in net income in the year to September 2019, a corporate filing shows. Net profit was up 40 per cent on the previous year.
It has been exploring a sale for months with the help of bankers at Goldman Sachs, according to two people with direct knowledge of the matter. It turned to private equity bidders after initially exploring a sale to rival groups.
>>> Up
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>>> Down
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* City Pub Cut to Sell at Panmure Gordon; PT 110 pence
* Entain PLC Cut to Neutral at JPMorgan (+)
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>>> Initiation
* Danone ADRs Rated New Equal-Weight at Morgan Stanley; PT $14
* Geberit Reinstated Hold at Deutsche Bank; PT 530 Swiss francs
* Hexpol Rated New Sell at Berenberg; PT 84 kronor
* InPost Rated New Hold at HSBC; PT 20 euros
* Johnson Service Rated New Buy at Berenberg; PT 190 pence
* Johnson Service Rated New Buy at Berenberg; PT 190 pence
* Kingspan Reinstated Hold at Deutsche Bank; PT 65 euros
* Passat Reinstated Buy at IDMidcaps; PT 10 euros
* Sika Reinstated Buy at Deutsche Bank; PT 295 Swiss francs
* Unibail Rated New Hold at SocGen; PT 63 euros
>>> Call
* Hexpol Valuation Too High, Gets New Sell Rating at Berenberg
* Lagardere Ebit Beat Driven by Publishing, Goldman Says (+)
* Ontex Cut at JPMorgan as Unclear Recovery Path Disappoints (+)
* Saint-Gobain’s Upbeat Outlook, Margin View Welcome: Jefferies
* Saint-Gobain’s Upbeat Outlook, Margin View Welcome: Jefferies
* Suez Earnings, Guidance Both Ahead of Expectations: Jefferies (+)
* Teleperformance LFL Growth ‘Astonishing,’ Morgan Stanley Says (+)
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Global bonds attempted to recover from an aggressive selloff that drove steep losses in Treasuries and U.S. stocks Thursday. Asian shares slumped and U.S. and European futures pointed lower.
Benchmark Treasury yields fell back below 1.5% and their Australian equivalents swung amid an unscheduled purchase operation from the country’s central bank. The U.S. 10-year yield traded as high as 1.6% Thursday, when a poorly received government auction led to forced selling by holders of mortgage securities. Japan’s benchmark hovered near its highest level since early 2016. The dollar extended overnight gains.
Stocks dropped more than 2% in Japan, South Korea and Hong Kong, and were weaker across the region. S&P 500 futures slipped after the benchmark closed down 2.5% with tech shares leading losses. The Nasdaq 100 tumbled 3.6%, the most since October, as investors rotated into companies poised to benefit from an end to lockdowns. Still, stocks popular with the day-trader crowd surged once again, with GameStop Corp. doubling at one point before ending 19% higher.
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Macro :
- Biden Takes First Military Action With Strikes on Syria Militias
Keep an eye on :
- AMS SM : Amadeus 4Q Adjusted Net Loss EU88.2M, Est. Loss EU103.2M
- ASMI NA : ASMI 1Q Revenue Forecast Beats Estimates
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- BAS GY : BASF Sees 2021 Adjusted Ebit EU4.1B to EU5B, Est. EU4.86B
- BEN FP : Beneteau Says 16-Month Rev. EU1.34B, Down 15%
- BDRILL NO : Borr Drilling 4Q Adjusted Ebitda $6.6M
- CFEB BB : CFE FY EPS Beats Estimates
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- COP GY : CompuGroup Medical to Buy Back Up to 500,000 Treasury Shares
- COLR BB : Colruyt Spends EU33m Buying More Virya Energy Convertible Notes
- DAI GY : Daimler to Work W/ Goldman, Citi, BNP on Trucks Spin-Off: Rtrs
- DTE GY : Deutsche Telekom Broadband Push Keeps Profit Growing in Pandemic
- ENEL IM : Enel Board Approves Issue of Hybrid Bonds Up To EU3B
- ENGI FP : *ENGIE TAKES EU2.9B NUCLEAR WRITEDOWN, 2020 NET LOSS EU1.5B
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>>> Up
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* Sandvik Raised to Buy at HSBC; PT 260 kronor
* Schroders Raised to Equal-Weight at Morgan Stanley
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>>> Down
>>> Down
* City Pub Cut to Sell at Panmure Gordon; PT 110 pence
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* Reka Industrial Oyj Cut to Sell at Inderes; PT 3 euros
* Salmar Cut to Hold at Pareto Securities; PT 600 kroner
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>>> Initiation
* Subsea 7 Cut to Hold at SEB Equities; PT 97 kroner
>>> Initiation
* Danone ADRs Rated New Equal-Weight at Morgan Stanley; PT $14
* Geberit Reinstated Hold at Deutsche Bank; PT 530 Swiss francs
* Hexpol Rated New Sell at Berenberg; PT 84 kronor
* InPost Rated New Hold at HSBC; PT 20 euros
* Johnson Service Rated New Buy at Berenberg; PT 190 pence
* Johnson Service Rated New Buy at Berenberg; PT 190 pence
* Kingspan Reinstated Hold at Deutsche Bank; PT 65 euros
* Passat Reinstated Buy at IDMidcaps; PT 10 euros
* Sika Reinstated Buy at Deutsche Bank; PT 295 Swiss francs
* Unibail Rated New Hold at SocGen; PT 63 euros
>>> Call
>>> Call
* Hexpol Valuation Too High, Gets New Sell Rating at Berenberg
* Saint-Gobain’s Upbeat Outlook, Margin View Welcome: Jefferies
* Saint-Gobain’s Upbeat Outlook, Margin View Welcome: Jefferies
Closing Stock Market SummaryThe S&P 500 dropped 2.5% on Thursday, as another steep rise in Treasury yields undercut risk sentiment and contributed to valuation-oriented weakness in the mega-cap/growth stocks. The Nasdaq Composite fell 3.5%, the Russell 2000 fell 3.7%, and the Dow Jones Industrial Average fell 1.8%.
Specifically, the yield on the 10-yr Treasury note climbed 13 basis points to 1.52%, which was above the S&P 500's dividend yield of 1.51% and 43 basis points higher than where it started the month. This rate of change didn't sit well with the market, even though it was expectations for economic growth and inflation that contributed to the higher yields.
What's more, the 10-yr yield briefly spiked to 1.61% following an ugly 7-yr note auction at 1:00 p.m. ET that saw weak demand. The 2-yr yield increased four basis points to 0.17%. The U.S. Dollar Index increased 0.1% to 90.25.
As for the price action in equities, the retreat was orderly throughout the day with growth stocks taking the brunt of the damage.
The S&P 500 consumer discretionary (-3.6%) and information technology (-3.5%) sectors dropped at least 3.5% amid weakness in their mega-cap components, the Philadelphia Semiconductor Index dropped 5.8%, and the ARK Innovation ETF (ARKK 129.51, -8.81) dropped 6.4%. Out of the 11 S&P 500 sectors, the utilities sector (-1.0%) declined the least.
NVIDIA (NVDA 532.30, -47.66, -8.2%) was an influential laggard with an 8% decline despite beating top and bottom-line estimates and issuing upbeat Q1 revenue guidance.
On the upside, shares of Twitter (TWTR 74.59, +2.67, +3.7%) closed higher after the company said it's aiming to double total annual revenue to $7.5 billion in 2023. Shares of GameStop (GME 108.73, +17.02, +18.6%) had doubled for the second straight day before closing with a more modest gain.
Interestingly, the S&P 500 closed above its 50-day moving average (3805) after coming within ten points of the key technical level at its intraday low (3814). Investors continued to brace for further downside, though, evident by the 35% spike in the CBOE Volatility Index (28.89, +7.55, +35.4%).
WTI crude futures ($63.47/bbl, +0.25, +0.4%) settled in positive territory.
Reviewing Thursday's economic data:
- Initial claims for the week ending February 20 decreased by 111,000 to 730,000 (consensus 820,000). Continuing claims for the week ending February 13 decreased by 101,000 to 4.419 million.
- The key takeaway from the report is that this is the lowest level of weekly initial claims since early November, which should lend some confidence to the notion that economic activity is picking up again following a late fourth quarter stupor.
- Durable Goods Orders for January surged 3.4% m/m (consensus 1.2%) following an upwardly revised 1.2% increase (from 0.2%) in December. Excluding transportation, durable goods orders rose 1.4% (consensus 0.6%) following an upwardly revised 1.7% increase (from 0.7%) in December.
- The key takeaway from the report is that it showed an ongoing pickup in business spending, evidenced by a 0.5% m/m increase in nondefense capital goods orders excluding aircraft. These orders -- a proxy for business spending -- are now up 8.3% yr/yr.
- The second estimate for Q4 GDP was revised to 4.1%, as expected, from 4.0%. The GDP Price Deflator was bumped up to 2.1% (Briefing.com consensus 2.0%) from 2.0%.
- The key takeaway from the report is that it won't be a market mover because (a) it was largely in line with expectations (b) it didn't change much at all from the first estimate and (c) it is dated information, having been released nearly two-thirds of the way through the first quarter.
- Pending home sales decreased 2.8% m/m in January following an upwardly revised 0.5% increase in December (from -0.3%).
Looking ahead to Friday, investors will receive Personal Income and Spending for January, PCE Prices for January, the final University of Michigan Index of Consumer Sentiment for February, and Adv. Intl. Trade in Goods, Retail Inventories, and Wholesale Inventories for January.
- Russell 2000 +11.4% YTD
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- S&P 500 +2.0% YTD
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