NEW YORK/HONG KONG - Amer Sports raised US$1.365 billion (S$1.83 billion) in a discounted US initial public offering on Jan 31, after investors expressed concerns about its growing reliance on China for its revenue, people involved in the process said.
It was another blow to the US IPO market seeking to recover after two years of subdued activity.
A poor performance from Amer Sports could discourage other IPO hopefuls.
A sizeable but smaller company, BrightSpring Health Services, priced its US$633 million offering last week below its indicated range.
Shares in BrightSpring, owned by private equity firm KKR, have been trading below their discounted IPO price.
Amer Sports, owner of Arc’teryx outdoor apparel, Salomon sporting goods and Wilson tennis gear, priced its IPO at US$13 per share, below its US$16 to US$18 per share indicated range, the sources said.
The company will sell five million more shares than the 100 million shares it had earmarked, one of the sources added.
At the IPO price, Amer Sports would be worth US$6.3 billion.
Amer Sports did not respond to a request for comment. Its shares will debut on the New York Stock Exchange on Feb 1.
Amer Sports generated 19.4 per cent of its sales in China in the first nine months of 2023, up from 8.3 per cent in 2022, its IPO prospectus shows.
Most of the sales come from the Americas and Europe, and while revenue in these regions has been growing, sales in China were up by 68 per cent in the first nine months of 2023 compared with the corresponding period in 2022.
The sources, who requested anonymity, said on Jan 31 that despite this, some potential investors are concerned about Amer Sports’ fortunes being intertwined with China’s economy.
A property crisis and a local government debt crunch has driven many investors to reduce exposure to China.
Amer Sports warned in its IPO prospectus that escalating trade tensions could lead to future tariffs or other curbs on its ability to sell goods in the US that it makes or sources in China.
Founded in Helsinki in 1950, Amer Sports was acquired by a consortium of primarily Chinese firms in 2019 for €4.6 billion (S$6.66 billion).
Anta Sports, a Chinese athletic clothing manufacturer with aspirations to take on Western rivals such as Nike and Adidas, holds a 56 per cent stake.
Under Anta’s ownership, Amer Sports’ ties to China have grown.
The company says in its IPO prospectus it now has key suppliers and manufacturing facilities in China, and that about 33 per cent of its products sourced from third-party suppliers were manufactured in the country in 2022.
Some of the investors have also expressed concerns that the company’s Salomon and Wilson brands are showing lower margins and slower growth than Arc’teryx, the sources said.
While Arc’teryx sales rose 65 per cent in the first nine months of 2023, Salomon and Wilson sales rose 35 per cent and 10 per cent, respectively.
Bloomberg News reported earlier on Jan 31 that the IPO price that Amer Sports was considering was $13 per share. REUTERS
