Shares in coffee group JDE Peet’s climbed more than 12 per cent in its first day of trading, after it raised €2.25bn to complete Europe’s biggest initial public offering since 2018.
The float on Friday marks one of the biggest IPOs since the coronavirus pandemic slammed global economies and put a severe chill on the market for new listings around the world.
JDE Peet’s, whose brands include Douwe Egberts, Kenco and Peet’s Coffee, climbed to a valuation of €16.8bn as its shares rose to €35.51 in early Amsterdam trading.
The listing was a big test for JAB Holding, the private investment group that manages the wealth of Germany’s billionaire Reimann family and controls JDE Peet’s.
JAB managing partner Olivier Goudet spent most of the past decade striking a series of leverage-backed deals to create what is now JDE Peet’s, preparing the company to take on rivals such as Nestlé. But other parts of JAB’s portfolio, including cosmetics group Coty, are facing stress.
The company, which dates back to a grocery shop established in the Netherlands by Egbert Douwes in 1753, sold 61.7m new and existing shares at a price of €31.50 earlier on Friday, equating to a 14.4 per cent stake in the business. If bankers on the deal elect to exercise an overallotment option, a further 9.2m shares may be sold.
To boost the IPO, JDE Peet’s secured cornerstone investment worth €100m from Quantum Partners and Palindrome Master Fund, both managed by Soros Fund Management, and €361m from Fidelity. In addition, JAB increased its ownership by purchasing €300m worth of new shares.
The €700m in new proceeds from the listing will be used to reduce the high debt levels at JDE Peet’s and strengthen its balance sheet. Shareholders including US food group Mondelez International sold some €1.55bn worth of existing shares in the deal.
Following the offering, JAB will remain the company’s largest shareholder through a holding company called Acorn that control JDE Peet’s. JAB’s direct interest will give it a 38 per cent stake. Mondelez will be its second-largest shareholder with 23.4 per cent.
“This is a company that doesn’t have a direct comparison in Europe — it’s unique, very large, and very resilient. There is not much else out there that investors are looking at so people had time to engage with this,” said Andreas Bernstorff, head of equity capital markets at BNP Paribas, one of three banks who led the deal.
The European IPO market has been lacklustre in recent months, as lockdowns and turbulent market conditions have deterred companies from floating shares.
JDE Peet’s roadshow was conducted virtually, over three days, rather than the traditional 14, to “immunise against market volatility”, according to a person close to the deal.