Surfstitch is wrapping up their presentations to potential investors ahead of their public listing. Reports in The Australian are that they have a convincing argument valuing their shares at a lower multiple of earnings to that of competitors like ASOS and Boohoo. Founders Lex Pedersen and Justin Cameron are going to retain a large stake in the company which will likely have a market cap between AU$280m and $335 million. Exactly the valuation range pegged when Billabong sold their 51% of the company for $35 million a few months ago. This deal packaged Billabong’s ownership with Swell which must have been a drag on their return in the deal.
Interestingly, it seems that market cap valuation ignores the acquisition earlier this month of the Quiksilver owned Surfdome for US$16 million. Either they don’t see any value added or it was too late to make it into the presentation (the deal was announced on November 11th, 2014).
The company is looking to list by mid-December and raise AU$100 million. Haven’t really seen any work on what they’re hoping to do with that cash as yet.