GrandVision closed today on Euronext at a price of €20.36 per share, after reaching a high of €20.50 and a low of €19.99 since it went public on Feb. 6. After announcing an indicative price range of between €17.50 and €21.50 a share for its planned public offering (IPO), the group's major shareholder, Hal, set the price of the shares at €20.00, giving it a market valuation of €5 billion.
That's nearly twice its annual turnover and more than ten times the adjusted (Ebitda) earnings before amortization that the group generated in 2013. GrandVision, which was much smaller when it was trading on the Paris stock exchange prior to its takeover by Hal, made Ebitda of €400 million on sales of €2.6 billion in 2013. The company said that its sales growth accelerated to about 4.3 percent on a comparable store basis in 2014, with an increase of around 6.1 percent in the fourth quarter.
In the first nine months of last year, GrandVision's Ebitda margin improved to 16.4 percent from the 2013 level of 15.3 percent. As reported in last issue of Eyewear Intelligence, analysts had given GrandVision a probable valuation of around €5.8 billion based on the comparable stock market capitalization of Luxottica and Fielmann.
While Luxottica is bigger in terms of total retail turnover, GrandVision points out that it is the world's largest optical retailer in terms of the number of stores, excluding sunglass specialty shops, and its geographical spread. It operates 33 leading optical retail banners with more than 5,600 stores in 43 countries, including big players such as GrandOptical and Générale d'Optique in France, Apollo-Optik in Germany, Vision Express in the U.K., or Avanzi and Gruppo Randazzo in Italy.
Hal, the parent company of GrandVision, has offered at least 51 million shares, or a maximum of 58.65 million shares including an overallotment option that can be exercised within 30 days of the initial flotation. This would correspond to between 20 and 23 percent of Hal's stake in the company. Hal would thus raise between €893 million and €1,097 million through the IPO.
As reported in the last issue of EWI, Hal is projecting annual growth rates in the medium term of at least 5 percent for GrandVision's sales and in the high single digits for its Ebitda.