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Bloomberg
Polish e-commerce group Allegro plans to raise about 1 billion zloty ($266 million) in an initial public offering in Warsaw, becoming the latest web-based company to take advantage of a buoyant market for the tech sector.
Allegro’s private equity owners Cinven, Permira and Mid Europa Partners also plan to sell shares in the IPO, the company said in a statement on Monday, without giving details. Allegro said it’s pursuing the offering to strengthen its financial position by repaying outstanding debt and to increase its public profile and brand awareness.
The sale by existing shareholders probably will be larger than the primary offering by the company, a person familiar with the transaction said, adding that none of the private equity owners will be completely exiting their stakes in the company.
Bloomberg News reported in June that the buyout firms were considering seeking more than 2 billion euros in the offering. They bought it from South Africa’s Naspers Ltd in 2016 for $3.25 billion.
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Ahead of the IPO, banks working on the offer are valuing Allegro, including net debt, at 26 to 27 times its earnings before interest, taxes, depreciation, and amortisation, the person said.
Based on projected earnings of 2 billion zloty for 2021, the enterprise value is expected to be almost $14.4 billion, and the equity value expected to be about $13 billion, the person said, adding that about 20-25% of the company is expected to be floated.
Allegro’s IPO comes as shoppers turn to online sites to buy everything from clothes to homeware after lockdowns across Europe kept people indoors for much of the year. Britain’s The Hut Group Ltd also is looking to ride this boom, aiming to raise as much as $2.4 billion in a London listing.
Europe’s anemic IPO market has seen only two listings raise more than $1 billion this year with volatile stock markets and the coronavirus pandemic putting a damper on new floats. Allegro is one of several IPOs anticipated in the coming months that could pass this cap, including The Hut Group and publisher Springer Nature. This year’s biggest offering so far is coffee giant JDE Peet’s BV’s $2.8 billion sale in May.
“We have over 12 million regular customers, over 100,000 small and medium businesses on our platform and we are such a trusted brand in Poland that Warsaw is the natural place to be for us,†Allegro’s Chief Executive François Nuyts said in an interview. The company is talking to a wide variety of local and international investors, and there is “significant†interest in the deal, he said.
The lockdown helped boost the company’s sales, which rose 52% to 1.77 billion zloty in the first half. Adjusted earnings rose 28% to 808 million zloty. Its net debt was 3.7 times adjusted Ebitda at the end of June.
Allegro is betting on an increase in Poland’s online retail market share, which it said was at about 8.4% in 2019, below 18% in the UK and 27% in China.
The company’s offering could come close to displacing Polish state-owned insurer PZU SA from its position as the country’s largest ever listing. PZU’s 2010 share sale raised the equivalent of 2.1 billion euros, but the IPO market has steadily declined since that landmark deal, with less than $100 million raised over the last three years combined, according to data compiled by Bloomberg.