Fill Your Boots: Dr. Martens joins a growing list of companies that could IPO in London in 2021

January 21, 2021

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2 min read

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What's going on here?

Dr. Martens, the British bootmaker backed by private equity group Permira, is planning to go public on the London Stock Exchange, in what would be one of the UK’s first major IPOs of 2021.  

What does this mean?

On Monday 11 January 2021, Dr. Martens confirmed plans for an IPO in London. Permira, which owns about 75% of Dr. Martens, plans to float at least 25% of the company. The listing could represent a big win for Permira, who bought the iconic bootmaker in 2014 for €380 million. Reuters have reported the deal could value Dr. Martens at over £2 billion.

Despite lockdowns forcing some of Dr. Martens 130 retail outlets worldwide to close; the company managed to grow throughout the pandemic, largely thanks to its online credentials. Sales were up 18% to £318 million in the six months to September 2020, while profits grew by a third to £86 million.

The Dr. Martens announcement comes after a busy end to 2020 for IPOs in London. London’s main market saw 17 listings in the fourth quarter compared to three in the previous quarter. Many analysts predict IPO activity in London will surge in 2021. 

What's the big picture effect?

Dr. Martens joins a growing list of companies that could IPO in London this year. Private equity-backed Moonpig has recently announced plans for a £1 billion flotation; while BrewDog, Darktrace, Deliveroo, MusicMagpie, TransferWise and Trustpilot are among those likely to list later in 2021.

Undoubtedly the blockbuster IPO deal in London last year was The Hut Group’s (THG) £4.5 billion listing. To see our article on that, click here. Since THG’s flotation, shares have climbed, with a 51% leap in revenues in the three months to the end of December.

Shortly after the Dr. Martens’ announcement, THG founder Matthew Moulding said: “the government should keep banging the drum for businesses to float in the UK. We can quickly get a real cluster of high growth tech businesses on the London Stock Exchange, which will then lead to a real tech community building out each year”.

 Big UK tech firms like Farfetch have turned their back on a London float in part because of the tough listing rules. However, in November 2020, the Treasury sought to address this issue by reviewing the rules governing public listings, in a bid to lure firms to float in the UK. 

Strong equity markets are making IPOs an attractive exit option for private equity firms like Permira. The FTSE 100 soared in the first days of trading in 2021, making its best ever start to a year and outperforming its rivals on the continent. Investors are piling into U.K. equities, helped by a long-awaited Brexit deal, global growth optimism, and an early rollout of Covid-19 vaccines. Interest in IPOs has also been encouraged by the frenzy surrounding the Airbnb and Doordash IPOs in the US, which were hugely oversubscribed. To see our article on Airbnb’s IPO, click here

Looking forward, the flotation of Dr. Martens looks like an early indication of what should be a busy year for IPOs in London. As investor confidence in the UK continues to build, expect to see more IPO announcements in the coming weeks and months of 2021.

Report written by Thomas Farrell

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