Permira to offload 6.5% stake in Dr Martens

Wahida Ahmed
06 January 2022

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European private equity firm Permira has announced it will offload approximately 6.5% of its holding in shoes designer Dr Martens through an accelerated bookbuilding process.

Permira has announced that its Luxembourg-based company, IngreLux Sarl, will sell approximately 65 million ordinary shares in Dr Martens through a placing to institutional investors. This will reduce Permira's stake in Dr Martens from roughly 43% to 36.5%.

The placing will amount to around 15% of Permira's share in Dr Martens. Barclays and Goldman Sachs are acting as joint bookrunners.

An accelerated bookbuilding process to institutional investors will take place immediately and the result of the placing will be announced after the bookbuilding process has closed. Ordinary shares in Dr Martens held by the seller that are not sold in the placing will be subject to a 90-day lock-up, subject to customary exemptions, according to a press release.

According to a Stock Exchange announcement, Dr Martens last closed at 421 pence per share, giving the company a market capitalisation of GBP 4.2bn, up by 14% from early 2021. Unquote reported in January 2021 that an IPO was executed via a placing to institutional investors. It was priced at 370 pence per share, which gave Dr Martens an implied market cap of GBP 3.7bn.

Dr Marten's turnover has gone up by 70%, growing from GBP 454.4m in 2019 to GBP 773m in 2021. During Permira's holding period, the company's turnover has grown by 370% (GBP 209m in 2014 to 773m in 2021). E-commerce revenue was up 73% compared with 2020, though retail was impacted by the Covid-19 pandemic due to store closures and restrictions, resulting in revenues declining by 40% in 2021.

The company's profit after tax was GBP 35.7m in 2021, down 52%. The company's EBITDA was up 22% since 2020, according to a Dr Martens financial statement.

The GP acquired its stake in Dr Martens via Permira V, which closed in June 2014 on EUR 5.3bn, according to Unquote Data. The fund invests in companies with enterprise values of EUR 500m-3bn and has an average equity ticket of approximately EUR 250m. Permira V has made six commitments, with 27% of its capital deployed. Investments include US-based TeamViewer, Germany-based Clariant Acetyl Building Blocks, and UK wealth manager Bestinvest, according to Unquote Data.

According to Unquote Data, Permira acquired Dr Martens for £300m in October 2013, with Barclays providing debt financing for the deal. Permira owns a majority stake in the company alongside Dr Martens' CEO and other former employees. The previous owner, the Griggs family, has a stake of almost 10%, according to Unquote.

Dr Martens is a British footwear brand headquartered in Wollaston.