Amer Sports, a collaborative venture of the Anta Group, made its mark by listing on the New York Stock Exchange on February 1st, under the ticker symbol "AS." This initial public offering saw Amer Sports releasing 105 million shares at $13.00 each, aiming to raise an impressive $1.365 billion.
This landmark IPO not only became the biggest of its kind globally in the early days of 2024 but also signifies Anta Group's expanding presence on the international capital stage with its second publicly traded company.
Despite the shares being priced at $13, below the initial January forecast of $16 to $18, Amer Sports managed a commendable debut, closing at $13.4 per share on its first trading day, slightly above its IPO price, bringing the company's market value to about $6.492 billion. This IPO was deemed a stable success despite not hitting its projected fundraising goal.
Significantly, post-IPO, investment firms such as Anamered Investments—co-founded by Anta and lululemon's Chip Wilson—and Tencent committed to substantial purchases of Amer Sports' stock, totaling $220 million and $70 million, respectively. These firms, alongside Anta with a 58% stake and Anamered Investments holding 21%, underline the strong backing and confidence from major shareholders in Amer Sports' value proposition.
Amer Sports, established in 1950 and headquartered in Helsinki, Finland, entered a new chapter under Anta Sports' leadership in 2019 following a €4.6 billion acquisition by a consortium including FountainVest SPV, Anamered Investments, and Tencent SPV. This strategic move was part of Anta's broader vision to cement its footprint in the global sporting goods market, leveraging Amer Sports' portfolio of premium brands such as Arc’teryx, Salomon, and Wilson to tap into the growing demand for outdoor sports among Chinese consumers and beyond.
The acquisition has propelled Amer Sports into a period of accelerated growth, driven by the increasing popularity of outdoor activities like skiing, hiking, and tennis. This growth trajectory is particularly evident in the performance of Arc’teryx, which reported a 61.8% increase in revenue in the first three quarters of 2023 alone, with a significant portion of its sales coming from the Greater China region, its largest market. Salomon and Wilson also reported revenues exceeding $1 billion in the fiscal year 2023, showcasing the robust demand for Amer Sports' offerings.
The prospectus reveals that Amer Sports enjoyed a robust annual growth rate of 20.4% from 2020 to 2022, with its gross profit margin improving from 47.0% pre-acquisition to 49.7%. In the first nine months of 2023, the company's revenue soared by nearly 30% to $3.053 billion, and its gross profit margin climbed to 52.2%, up from 49.4% in the same period the previous year. Despite a 9.1% increase in net losses, reaching $114 million, Amer Sports attributes this to losses on the valuation from selling off the Mavic, Suunto, and Precor brands. With these divestitures complete, Amer Sports is set to further its transformation, concentrating on its primary brands to boost its profitability.
Amer Sports' listing on the New York Stock Exchange has underscored the undeniable importance of the Greater China market to its overall strategy. Between 2020 and 2022, the company witnessed its revenues in this region skyrocket from $202 million to $524 million, boasting an impressive compound annual growth rate of 60.9%. This growth trajectory continued into the first three quarters of 2023, with revenues jumping 67.6% to $593 million, thereby elevating Greater China to become its third-largest market globally, trailing only Europe and the Americas.
This heavy reliance on the Chinese market, while establishing a solid foundation for Amer Sports, also presents a double-edged sword. The brand faces the challenge of sustaining its competitive advantage amid the ascent of domestic brands and a persistent consumer shift towards more economical options, especially given its portfolio of high-end brands.
Additionally, Amer Sports' significant debt levels pose a concern, with a direct impact on its financial performance and, consequently, affecting Anta Group's profitability.
Despite these challenges, the IPO of Amer Sports has broader positive implications.
This move not only injects substantial capital into Amer Sports, enhancing its stature and enabling greater global visibility for its brands, but it also sets the stage for Anta Group, its principal shareholder, to advance towards its ambitious "International Dream." Rumors of Anta's plans to venture into the US market by March 2024, though unconfirmed, suggest a strategic move long anticipated by industry watchers. Given Anta Group's steady position as a global sports apparel powerhouse, its expansion into international markets seems not just strategic but inevitable.
The IPO success of Amer Sports not only reaffirms Anta Group's global aspirations but also potentially paves the way for a strategic entry into the US market, promising a new chapter of growth and global recognition for the Anta brand.