Amer Sports Swings $1.4 Billion IPO Signals New Path For Cross Border Deals

NEW YORK, Feb. 1, 2024 /PRNewswire/ -- Global sports equipment leader Amer Sports, Inc. debuted on the New York Stock Exchange today, raising $1.37 billion in its initial public offering. The company, backed by a consortium of ANTA Sports, Fountain Vest Partners, Anamered Investments (Chip Wilson, Founder of Lululemon), Tencent and ZWC Partners, set an issue price of $13 dollars per share, valuing it at approximately $6.5 billion dollars as of this writing.

Amer Sports, a Finnish company founded in 1950 that is the owner of iconic brands, led by three core brands: Arc'teryx, Salomon, and Wilson, covering categories such as clothing, footwear, equipment, protective gear, and accessories. The consortium led by ANTA Sports acquired the Finland-founded sportswear group in a deal that valued it at $5 billion at the time.

The prospectus shows that in the first three quarters of 2023, Amer Sports' revenue in the Greater China region increased by 67.6% year-on-year to $593 million, exceeding the revenue scale in the region for the entire year of 2022. Amer Sports stated that the operating profit margin in the Greater China region exceeded the group's overall profit margin. It is noteworthy that, thanks to the implementation of DTC (Direct-to-Consumer) approach and the rapid store openings in the Chinese market, the purchasing power of Chinese consumers for Arc'teryx is even stronger than that in North America, with the store efficiency in China nearly double that of North America.

The IPO marks a key milestone in cross-border investments activity, said the partner of Asian PE firm ZWC Partners, Michael Yao, and could serve as a blueprint for more such deals in the future. 

The transaction leverages fast-growing consumer class and rising interest in healthy lifestyles including sports to the power of venerable brands with a long history as leaders in their fields, Yao said. 

In addition, after years of economy's fast growing among countries, Asian consumer sector has accumulated effective marketing strategies and retail expertise. Demands for premium sport and outdoor brands are on rising trend in Japan, South Korea, Greater China and Southeast Asia region.

Amer Sports' success mirrors the broader trend of rising brand consumption in Asia. Consulting firm Bain predicts the region will account for over 50% of the global luxury market by 2025, with China and Japan remaining key spenders. Southeast Asia's booming economy, growing affluence, and young middle class's preference for luxury goods further highlight the region's potential.

Yao said that Amer has only just started to explore the potential of its portfolio of brands in this region, with consistent growth in other international markets, like US and Europe.

"ZWC Partners has always believed that fast economic growth and wealth accumulation in Asia are powering a new consumer class, and we foresee that as a long-term trend," Yao said, "Consumption will gradually increase across various sectors alongside an evident brand upgrading."

The Amer deal sets a precedent for others to follow, Yao said, where they can bring strategic partners across borders for a win-win outcome. His firm is looking at potential investments in international consumer brands which ZWC could assist with its abundant resources across other Asian markets.

SOURCE ZWC Partners