The Deal Market After the IPO Rush – WWD

The old adage that nothing draws a crowd like a crowd has been truer than ever in IPO stampede last year.

Hot stock market, investors reassess consumer space and fashionThe post-pandemic outlook attracted an unprecedented group of companies to the mass market last year – from Allbirds arrive Rent a runway Inc. arrive Warby Parker Inc. to Zegna.

It’s a hard move to follow.

But much of the necessary parts for many of this year’s deals are already in place.

Marc Cooper, chief executive officer of investment bank Solomon Partners, said in a world analysis of the 2022 deal: “The market is flooded with capital, companies with low borrowing costs, the equity market. Having reached – and in some cases exceeded – pre-pandemic levels, the IPO engine continues to rumble and private equity investors are looking to deploy historic cash levels. ”

Many companies are looking to move to Wall Street this year – including Rue Gilt Groupe Inc. and saks.com — but the initial public offering could give way to something else as the backlog of companies ready to go public dwindles.

If the stock market takes a break, private equity players could begin to reassert themselves, as many have been waiting on the sidelines, unwilling to compete head-to-head with a foamy Wall Street. retail and fashion.

There’s also a bit of skepticism surrounding the IPO craze that could lead to more deals happening – maybe not this year, but next year and beyond. A prominent investor has told WWD that the longer list of more questionable IPOs in 2021 will be the prospect of a private equity deal in the next few years.

The other group of players to watch are companies that are still retooling, acquiring new expertise, entering new types of markets, or simply looking to build their portfolios. .

A taste of that deal was witnessed in late 2021, when Nike Inc. buy RTFKT ready for the metaverse and when Crocs Inc. signed a $2.5 billion deal to buy casual footwear brand Hey Dude.

Others are out and about in the hunt.

Capri Holdings CEO John Idol tell investors that the company would be disciplined in its approach to the deal, stressing that he still had a lot in the game after buying Versace and Jimmy Choo and adding them to Michael Kors’ business.

“We believe we will continue to focus solely on the luxury sector, which essentially means – and I mean almost exclusively – that European luxury companies are really capable of minimum 1 billion dollars because it is not really worth our time, energy and effort to do something that will only add up to hundreds of millions of dollars, even though it is a business. very big business,” said Idol. “It has a type the same amount of energy and effort to put that into a few hundred million as it did in a business worth over $1 billion.

“So we’re active,” said Idol. “We are actively looking. We actually even engage in curated chats, nothing is going on, but we’re active. ”

More from WWD:

Nike buys RTFKT ready for Metaverse

Year-end summary: Fashion transforms the IPO craze

Wrapping up the year: C-suite changes rocking the industry

https://wwd.com/business-news/financial/what-to-watch-2022-deal-ipo-mergers-capri-versace-nike-1235023117/ The Deal Market After the IPO Rush – WWD

Linh

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