Levi’s Announces IPO, Hopes To Hit $6.17B Market Cap

Levi Strauss & Co. announced plans to raise as much as $587 million in an initial public offering (IPO).

No date was given for the IPO. Levi Strauss will trade on the New York Stock Exchange under the ticker "LEVI." The company did IPO in 1971 but was again taken private in a leveraged buyout in 1985.

The IPO is expected to give the company, which was founded in 1853, a market value of up to $6.17 billion. Levi Strauss invented the blue jeans in 1873.

The lead underwriters for the IPO include Goldman Sachs and JPMorgan. Bank of America Merrill Lynch, Morgan Stanley, and Evercore Group are also involved.

The iconic maker of tough denim blue jeans and its selling stockholders are offering a combined 36.7 million shares priced between $14 and $16 a share. The company said its offering some 9.5 million shares and its selling stockholders are offering 27.2 million shares.

According to its public filing, Levi Strauss plans to use the proceeds from the listing mainly for general corporate purposes such as working capital, operating expenses, and capital expenditures. Proceeds from the listing might be used for future acquisitions, but Levi Strauss said it has no immediate plans to acquire a company at this time.

"Our mission is to be, and be seen as, the world’s best apparel company and one of the best performing companies in any industry," said the company.

"Our business is operated through three geographic regions that comprise our three reporting segments: the Americas, Europe and Asia, which includes the Middle East and Africa. We service consumers through our global infrastructure, developing, sourcing and marketing our products around the world. Our Americas, Europe and Asia segments contributed 55%, 29% and 16%, respectively, of our net revenues in fiscal year 2018."

Levi Strauss generated $5.6 billion in revenue in 2018, up 14% year-on-year. It saw a full-year net income of $285 million of last year, which is about similar to that in 2017. It said net income was flat due to higher operating income and lower interest expense, among others.

For the fourth quarter and fiscal year ended Nov. 25, 2018, the company reported an outstanding year with reported net revenues of $5.6 billion, growing 14 percent year-over-year. On the other hand, net income plummeted 17 percent to $97 million, primarily due to a tax charge related to the impact of the Tax Cuts and Jobs Act.

“It’s clear our strategies to diversify our product portfolio, expand our direct-to-consumer business, and deepen our connection with consumers worldwide have worked, resulting in both higher annual revenues and gross margins,” said Chip Bergh, president and CEO.