Zalando confirms €21.50 share price for IPO

Earlier this month, the online fashion retailer announced a share price range of €18-22.50 for its 1 October entry onto the Frankfurt Stock Exchange.

The listing will net the company and its investors €605m, not quite hitting the €630m if priced at the top end of the range, but significantly more than the €440m that could have been achieved at €18 per share without the greenshoe option.

Zalando's offering prospectus states it anticipates proceeds from the IPO will be used for geographical expansion, as well as "expansion into new or related lines of business and selective acquisitions".

Almost 24.5 million newly issued shares will be offered. The overallotment option to release an extra 3.67 million shares has been exercised, as the company stated the offering was more than 10x oversubscribed. In total, 11.3% of the online retailer's equity will be placed.

Zalando also offered all its permanent employees shares worth €180 and a 25% discount on further shares up to €720. More than 4,000 of its 7,000 employees have taken advantage of the offer. It has already received a cornerstone investment of around €127m from investors including the Scottish Mortgage Investment Trust.

It will list on the prime standard market of the Frankfurt Stock Exchange on 1 October 2014 under the ticker ZAL111, following confirmation at the start of September that it intended to float. This ended almost a year of speculation about the company's plans.

All existing investors will retain their stakes in the company. Sweden-based Kinnevik will remain as the largest shareholder with 36%, alongside the Samwer brothers' Global Founders (formerly European Founders Fund) with 17%.

Start-up incubator Rocket Internet, which announced its intention to float on the entry standard market of the Frankfurt Stock Exchange a week after Zalando, transferred its entire shareholding to its main backer Kinnevik in August last year. If all new shares are placed and the greenshoe option is exercised, Kinnevik will hold 31.6% of Zalando, while Kinnevik and Global Founders will together hold 11.1%.

Anders Hoch Povlsen holds a 10% stake, while DST Europe and Holtzbrinck Ventures each have an 8% shareholding. Tengelmann rounds out the list of existing investors, with 5% of Zalando's stock.

The fashion retailer posted sales of more than €2bn in the year to 30 June 2014, having achieved turnover of €1bn in the first half of 2014. The DACH region provided more than half of this revenue, chalking up almost €600m in sales in H1 2014. Sales were boosted by around 30% from €800m in the first half of 2013.

Morgan Stanley, Goldman Sachs and Credit Suisse have been appointed as joint global coordinators and joint bookrunners for the impending IPO. Deutsche Bank and JP Morgan are acting as joint bookrunners, while Jefferies and Stifel Nicolaus Europe are co-lead managers.

The Berlin-based company sells clothing and accessories for men, women and children across Europe via its e-commerce site, which receives 100 million visits per month and has 13.7 million active customers, according to Zalando's prospectus. As well as its online presence, it also has an outlet store in Berlin and three fulfilment centres, which it claims can handle approximately twice the revenue generated in the year to 30 June 2014.

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• Topics
• DACH
• Consumer
• Exits
• IPO
• Germany