Wall Street Has Mixed Feelings on Coty, Inc. (COTY) Ahead of IPO Pricing
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Coty, Inc. (NYSE: COTY) is intriguing Wall Street like an enticing scent infiltrating the nostrils.
Set to price its initial public offering (IPO) late Wednesday, the company behind perfumes from Lady Gaga to Calvin Klein is looking to raise $1.22 billion in the offer. The WSJ notes that the debut would make it the largest IPO for an U.S.-listed consumer-products company.
The IPO market has been hot as well, with about $19.6 billion of new listings hitting U.S. markets this year. Dealogic data has just 25 percent of those offerings pricing below Wall Street expectations, which is the lowest since 2009.
Some are skeptical, with names like Joh. A. Benckiser GmbH, Berkshire Partners, and Rhone Capital expected to own 97.7 percent of voting shares following the offering. Further, most of Coty's sales come from Europe, a region still mired in debt concerns and stagnant economic growth.
Coty is expected to price the offering in a range of $16.50 to $18.50 per share. The midpoint would value the company at $6.9 billion. Valuation at the high-end of expectations amounts to 21.6 times Coty's expected earnings for 2013. That's richer than most peers and unusual given most IPOs receive valuation below expectations to entice investors.
In terms or growth, Coty is looking beyond Europe and aiming to ride the wave of middle-class expansion in emerging markets. The company is looking to draw at least one-third of its sales from that market in about five years, versus emerging markets accounting for just 23 percent of sales last year.
Peers in the segment include Avon Products (NYSE: AVP) and Elizabeth Arden (Nasdaq: RDEN).
Coty, Inc. will list on the New York Stock Exchange under the ticker "COTY." It will offer 57,142,857 chares in the IPO, with 382,830,520 shares outstanding following the offering.
Set to price its initial public offering (IPO) late Wednesday, the company behind perfumes from Lady Gaga to Calvin Klein is looking to raise $1.22 billion in the offer. The WSJ notes that the debut would make it the largest IPO for an U.S.-listed consumer-products company.
The IPO market has been hot as well, with about $19.6 billion of new listings hitting U.S. markets this year. Dealogic data has just 25 percent of those offerings pricing below Wall Street expectations, which is the lowest since 2009.
Some are skeptical, with names like Joh. A. Benckiser GmbH, Berkshire Partners, and Rhone Capital expected to own 97.7 percent of voting shares following the offering. Further, most of Coty's sales come from Europe, a region still mired in debt concerns and stagnant economic growth.
Coty is expected to price the offering in a range of $16.50 to $18.50 per share. The midpoint would value the company at $6.9 billion. Valuation at the high-end of expectations amounts to 21.6 times Coty's expected earnings for 2013. That's richer than most peers and unusual given most IPOs receive valuation below expectations to entice investors.
In terms or growth, Coty is looking beyond Europe and aiming to ride the wave of middle-class expansion in emerging markets. The company is looking to draw at least one-third of its sales from that market in about five years, versus emerging markets accounting for just 23 percent of sales last year.
Peers in the segment include Avon Products (NYSE: AVP) and Elizabeth Arden (Nasdaq: RDEN).
Coty, Inc. will list on the New York Stock Exchange under the ticker "COTY." It will offer 57,142,857 chares in the IPO, with 382,830,520 shares outstanding following the offering.
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