Apollo's Watches of Switzerland announces intention to float

Kenny Wastell
09 May 2019

Tweet
Facebook
LinkedIn
Google plus
Send to

Apollo Global Management portfolio company Watches of Switzerland Group has announced its intention to float on the London Stock Exchange.

The proposed IPO comprises both new and existing shares, with Apollo looking to reduce its stake while remaining a controlling shareholder.

The IPO could give the group, which comprises the Watches of Switzerland, Goldsmiths, Mayors and Mappin & Webb brands, a market cap of up to £800m, according to various earlier media reports.

The latest announcement states that the business is looking to raise £155m through the process, which is earmarked for the reduction of the group's net debt to around £120m. This equates to 1.56x adjusted EBITDA before exceptional costs and non-underlying items for the year ending in January 2019. A further 15% stake could be made available through a potential overallotment option.

According to a statement released by Watches of Switzerland at the beginning of May, the group is aiming for a free float of at least 25% excluding the overallotment option.

Apollo acquired a majority stake in Watches of Switzerland in 2013. The group has since been pursuing international expansion, with a particular focus on the US market. It acquired US retailer Mayors in 2017 and now has a network of 21 stores in the country.

According to the earlier statement, the luxury watch retail group's revenues have grown at a compound annual growth rate (CAGR) of 18% since 2014 and its EBITDA has grown at a CAGR of 35.1%. The business generated adjusted EBITDA of £67.7m from revenues of £746m in the year ending in January 2019.

Watches of Switzerland operates through 125 bricks-and-mortar stores in addition to its e-commerce platform, and sells brands including Rolex, Patek Philippe, Tag Heuer, Omega, Breitling, Cartier and Audemars Piguet.

Barclays, Goldman Sachs International, BNP Paribas, Investec Bank and Rothschild & Sons are advising the group on the flotation.