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Banks jostle to underwrite Wiggle IPO: report
Posted on Monday, 03 October 2011 15:05
Six investment banks are pitching to float Wiggle, according to the Telegraph, as the UK-based online cycle shop lines itself up for an initial public offering (IPO) and a sale.
Rothschild is advising the company, which claims to be the number five online sporting goods retailer, in a dual track process and is about to send a memorandum to potential buyers, the newspaper said.
The report did not name the investment banks which are vying for an underwriting mandate, though it did say that both trade and private equity firms are being targeted in the beauty parade.
Wiggle sells mountain bikes, road bikes, parts and accessories. It started out as Butlers Cycles, a small independent shop in Portsmouth which began trading in 1920.
After initial success selling bike parts online, Wiggle.co.uk was launched in 1999. It still focuses on bikes but has expanded into triathlon products.
International sales are growing at an impressive rate and the company exports to 70 countries.
It is backed by ISIS, which provided equity during a 2006 management buyout worth GBP 12.25 million.
Other shareholders include former Asda chief executive Andy Bond, who bought a stake in 2010 and has a seat on the board.
According to the Telegraph, a transaction could happen early next year and value Wiggle at GBP 200.00 million.
During the 12 months to 31st January 2011, Wiggle generated revenue of GBP 137.91 million after an annual increase of 53.7 per cent (FY 2010: GBP 89.72 million).
Revenue almost tripled between financial 2009 and 2011, pushing pre-tax earnings 152.2 per cent higher to GBP 16.23 million from GBP 6.44 million in two years.
The firm has benefitted from increased interest in cycling, and this is likely to continue as Team GB’s Mark Cavendish and Bradley Wiggins prepare for the London 2012 Olympics.
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