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Peloton set for USD 8bn+ valuation after setting price range
Posted on Wednesday, 11 September 2019 10:30
Peloton Interactive has set a price range on its upcoming initial public offering (IPO) that could value the US exercise equipment startup at more than USD 8.00 billion. The New York-based company, which streams instructor-led fitness classes live and on-demand intends to sell 40.00 million shares at USD 26.00 to USD 29.00 apiece. It has provided underwriters, comprising 21 in total and which are led by Goldman Sachs and JPMorgan, with a 6.00 million stock overallotment option. At the top end of the price range, and assuming the green shoe is exercised in full, the first-time share sale could fetch as much as USD 1.33 billion. However, Peloton has also entered into an agreement to sell USD 50.00 million-worth of class A stock to existing backer TCV, which should offset the dilution effect of the offering. The investor will retain a total voting power of 6.7 per cent following the listing and the concurrent private placement. Peloton noted the main purpose of the flotation is to increase its capitalisation and financial flexibility while creating a public market for its stock. The company intends to use money raised for working capital and other general corporate purposes, which may include research and development and sales and marketing activities, general and administrative matters, and expenditures. While it may also use a portion of the proceeds for the acquisition of, or investment in, technologies, solutions, or businesses that complement its operations, it does not have binding agreements or commitments in place for such transactions. Based on the top end of the price range and the exercise of the overallotment option, the IPO would be the 13th largest announced in 2019 to date, according to Zephyr, the M&A database published by Bureau van Dijk. Peloton incurred a net loss attributable to shareholders of USD 245.70 million on total revenue of USD 915.00 million in the fiscal year ended 30th June 2019. © Zephus Ltd