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Farfetch could be worth $4.85B after IPO; Pinault family may invest

Farfetch Ltd. on Sept. 5 launched its initial public offering in a deal that could value the online fashion retailer at about $4.85 billion and disclosed that the holding company of the Pinault family, which controls Gucci owner Kering SA, could acquire a stake.

Farfetch, which announced Aug. 20 that it had filed a registration for an IPO on the New York Stock Exchange, in its prospectus indicated that 10.5% of its shares initially would be traded.

The U.K. company plans to sell 30,056,495 class A ordinary shares at a price between $15 and $17 per share. Other shareholders intend to sell 7,447,006 class A ordinary shares, it said. Underwriters have the option to purchase up to an additional 5,625,525 shares at the listing price.

Assuming an offer price of $16, the midpoint of the indicated range, Farfetch estimated net proceeds of about $446.5 million, which it intends to use for working capital, to fund growth and other general corporate purposes, including possible acquisitions.

Artemis SA, the Pinault family investment arm, has indicated an interest in purchasing an aggregate of up to $50 million of shares at the IPO price. However, Farfetch noted that because the interest was not a binding agreement or commitment to purchase, Artemis could invest more than that amount, less, or nothing at all.

Following the listing, Farfetch CEO José Neves will hold about 15% of the class A ordinary shares while other shareholders, including Kadi Group Holding Ltd., a subsidiary of Chinese e-commerce giant JD.com Inc., will hold 74.5%.

Neves will control 78% of the voting rights through his holding of class B shares, which entitle holders to 20 votes per share.

Farfetch was founded in 2007 by Neves and carries clothing and accessories from brands including Gucci, Dolce & Gabbana and Stella McCartney.

In 2017, it generated revenue of $386.0 million and had 935,772 active users as of Dec. 31, 2017, according to its application to the SEC.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Allen & Company LLC and UBS Securities LLC are acting as joint lead book-running managers for the proposed offering.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are acting as joint book runners for the proposed offering.

Cowen & Co. LLC and BNP Paribas Securities Corp. are acting as co-managers.