Market Overview

Leslie's Prices IPO Above Target To Raise $680M

Leslie's Prices IPO Above Target To Raise $680M

Leslie’s Inc. priced 40 million shares at $17 per share in its initial public offering on Wednesday.

What Happened: The $680 million offering gives the direct-to-consumer pool and spa care brand an enterprise valuation of $3.17 billion based on total outstanding shares, Reuters noted.

Leslie's has priced the IPO above the $14 to $16 range it indicated in a filing with the U.S. Securities and Exchange Commission last week.

The company's shares are set to list on the Nasdaq Stock Market under the symbol “LESL” on Thursday.

Of the 40 million shares to be issued, 75% would be issued by Leslie and the balance 10 million would comprise of shares from private investors — L Catterton and the Singapore sovereign wealth fund GIC. Both these investors would continue to hold a majority controlling interest after the public issue.

Certain BlackRock Inc (NYSE: BLK)-managed funds could also invest up to $100 million through a private placement.

Why Does It Matter: Funds raised through the IPO would be directed towards repayment of Senior Unsecured Floating Notes 2024, partial repayment of borrowings under the August 2016 Term Loan Credit Agreement, and for general working capital purposes, Leslie's said.

The demand for indoor pool has accelerated during the pandemic with pool permit through July rising 32% compared to the same period in 2019, research by P.K. Data suggests. Forecasts suggest that up to 200,000 new pools could be constructed in 2020 and 2021.

Leslie has a strong presence aftermarket product segment, with a market share between 40% to 50%. The company's closet market peer in the indoor pool segment is Pool Corporation (NASDAQ: POOL).


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