Argand-backed Cherry announces intention to float

Harriet Matthews
07 June 2021

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Gaming equipment producer Cherry, a portfolio company of Argand Partners, has announced that it intends to list on the Frankfurt Stock Exchange.

The listing will comprise new shares from a capital increase valued at around €140m, as well as existing shares from a secondary placement.

The company intends to use the proceeds from the IPO to support its organic growth, as well as to make selective acquisitions. The company also plans to repay some of its existing debt as part of a refinancing in the context of the IPO, according to a statement.

Hauck & Aufhäuser will act as sole global coordinator and joint bookrunner, while ABN Amro (in cooperation with Oddo BHF) and MM Warburg will act as joint bookrunners for the IPO.

The gaming sector has been one of the winners of the pandemic, as reported by Unquote, with soaring consumer demand and valuations making it an appealing sector for PE and VC players alike.

As a gaming hardware producer, Cherry has also benefited from this trend. The company said in a statement that it has seen significant revenue growth over the past year. The company posted 2020 revenues of €130.2m and adjusted EBITDA of €37.1m. In Q1 2021, the company generated revenues of €37.7m, an increase of 35.6% compared with Q1 2020. The company reported an adjusted EBITDA margin of 29% in Q1 2021.

Argand acquired Cherry in an SBO from Genui in 2020, ending a four-year holding period. Unquote sister publication Debtwire reported at the time that the US-based sponsor's bid for the company was around €200m; the company was originally marketed based on EBITDA of €22m, which was adjusted up to €28m as the company continued to trade well in spite of the coronavirus pandemic.

The announcement comes on the same day that e-commerce bike platform Bike24, a portfolio company of The Riverside Company, also announced its intention to float in Frankfurt. Bike24 posted 2020 revenues of €199.2m and adjusted EBITDA of €26.7m. The company sells bikes and e-bikes, as well as bicycle parts and related accessories.

Riverside acquired Bike24 in September 2019 from Bridgepoint portfolio company WiggleCRC. If the company successful completes its IPO, it will be the second e-bike business with PE backing to float in Germany in 2021; in May 2021, Finatem listed gear and components producer HGears with a market capitalisation of €270m, retaining a 30% stake in the business, as reported.

PE-backed IPOs totalling more than €18.5bn have been completed in the DACH region to date in 2021, ranging from VC-backed Auto1's €7.9bn flotation to the €162m listing of Paragon Partners' Apontis Pharma.