Boohoo float to raise £300m
ONLINE fashion retailer Boohoo will raise £300m when it floats next week.
The Manchester business has placed 600 million shares at 50p each with institutional investors, giving it a market value of £560m.
The Dale Street firm was founded in 2006 by joint chief executives Madmud Kamani and Carol Kane and is considered to be the UK’s leading own-brand fashion retailer.
The float represents a major windfall for the Kamani family which is selling around half of its 84% stake. Carol Kane is also selling around half her 10% holding.
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In a statement issued today Boohoo said it expects to use £50m on its expansion plans with some money invested in distribution facilities and paying off the mortgage on a warehouse in Burnley.
Mr Kamani, rejected talk of a new dot-com bubble arguing the company’s 50x earnings multiple reflected the potential in the business, however.
He said: “I don’t know anything about a bubble, I know about Boohoo. The valuation is set by the market and the investors.We need to invest in our business.”
Around £240m of the proceeds will be used to repay convertible loan notes held by existing shareholders. Following admission to the Alternative Investment Market (AIM) on March 14, the board and the Kamani family will hold a 44% stake.
In the 10 months to December 2013, sales increased by 70% to £91.9m and adjusted EBITDA grew 188% to £10.1m. Analysts expect earnings to grow to £30m on sales of £292m by 2016.
Around 2.3 million people have already signed up to its service and some 140,000 register each month.
Mr Kamani said: “We are delighted to announce that our initial public offering has been successful. The placing and admission to AIM marks a significant step for Boohoo as we invest in this exciting growth opportunity underpinned by the rapidly growing online retail market.
“We would like to welcome our new shareholders to the company and look forward to continuing to develop our business providing market leading customer service for on-trend, value led fashion clothing and accessories as a publicly quoted company.”
Boohoo’s nominated adviser and broker is Manchester-based Zeus Capital, which will have led four of the top six AIM fund-raisings in the last year.
The firm has also had recent success with 4d pharma and parcel delivery firm DX Group.
