Allegro.eu IPO commences trading on the Warsaw Stock Exchange
Funds advised by Mid Europa Partners, Permira and Cinven (together “the Sponsors”) acquired Allegro.eu in January 2017 for US$3.25 billion (€2.75 billion). The value creation strategy involved investing in the experience and convenience of Allegro’s services to both consumers and merchants. Initiatives included the development of a best-in-class mobile app, improved logistics solutions and pricing tools, and the launch of Allegro SMART! – the subscription-based loyalty program whose subscriber base has grown to 2.1 million subscribers at 30 June 2020.
The impact of these initiatives, under leadership of Allegro’s Chairman Darren Houston, CEO François Nuyt and the enhanced management team recruited to the Group, has been significant. Over the lifetime of the Sponsor’s investment, General Merchandise Value (GMV) grew by 99%, net revenue by 102% and adjusted EBITDA by 113% on a last-twelve month (“LTM”) basis. Most recently, GMV growth increased further to 54% (LTM to 30 June 2020) as consumers turned to Allegro to provide them with goods during the ongoing COVID-19 pandemic.
In addition to the significant business growth and value creation, Allegro has seen a substantial increase in employees from 1,380 at the end of 2016 to nearly 2,300 as at 30 June 2020.
Due to the strength of investor demand the original offer of shares was up-sized, with c. 182.6 million shares sold by the Sponsors in the IPO (in aggregate), raising PLN 7.85 billion (€1.76 billion) while retaining an aggregate equity stake in the Group of c. 73% post-listing (before exercise of the over-allotment option). Should the over-allotment option be fully exercised, the Sponsors will realise a further PLN 1.38 billion (€308.72 million).
Paweł Padusiński, Partner and Head of Warsaw Office of Mid Europa Partners said:
“Allegro’s success story is one of the best testimonies to Mid Europa’s strategy focused on supporting the leading consumer facing businesses in Poland and Central Europe. During our investment in Allegro, we have provided our local investor perspective to the Board and, through our Warsaw based team, have worked closely with Allegro’s highly talented and motivated management. Jointly with our partners, we have helped develop Allegro into a Top 10 global e-commerce marketplace. I am very pleased that this CEE success story was recognized by so many reputable institutional and retail investors. Allegro can now start its new growth chapter as a public company, after having completed the largest ever IPO on the Warsaw Stock Exchange.”
Lazard & Co., Limited acted as Independent Financial Advisor; Goldman Sachs International and Morgan Stanley & Co. International plc acted as global coordinators and joint bookrunners; Barclays Bank PLC, BofA Securities Europe SA, Citigroup Global Markets Limited and Dom Maklerski Banku Handlowego S.A. as joint bookrunners; Santander Bank Polska S.A and BM PKO BP as joint bookrunners and co-offering agents in Poland in connection with its offer to retail investors; Bank Polska Kasa Opieki Spółka Akcyjna, Crédit Agricole Corporate and Investment Bank, Erste Group Bank AG, Pekao Investment Banking S.A. and Raiffeisen Centrobank AG, as co-lead managers.
Clifford Chance acted as legal counsel to the Issuer; Greenberg Traurig Grzesiak acted as legal counsel to the Issuer in Poland; Allen & Overy acted as legal counsel to the underwriters; PwC acted as reporting accountant; E&Y acted as tax advisor.
