Weber IPO: What to look for when the outdoor grill maker goes public

The thriving capital market and ample fund availability continue to drive emerging companies to stock exchanges and the IPO space is witnessing record activity. Weber-Stephen Products LLC is preparing to come out of the private realm and become a public entity under the name Weber, Inc. The company has witnessed solid growth in recent months, thanks to the popularity of home grilling/smoking during the virus-induced shutdown.

$6-bln Valuation

The company, which is on a mission to revolutionalize outdoor cooking through its technology-enabled products, is looking to list on the New York Stock Exchange under the ticker symbol WEBR. Post-IPO, Weber could reach a valuation of up to $6 billion. The group of book-runners is led by JP Morgan, Goldman Sachs, and Bank of America, which had managed a funding round for the company last year.

Meanwhile, the management is yet to disclose the size of the IPO and the offer price. Of late, investor demand for IPO stocks has not been very encouraging, but Weber’s strong fundamentals and brand power, together with the scale of business and ability to create shareholder value, make it an investment option worth considering. The extensive omnichannel network, comprising DTC, e-commerce, and wholesale, helps maintain the leadership position in key markets.

70-year Legacy

Weber was founded in 1952 by George Stephen who is credited for making the first charcoal grill called Weber Kettle. Headquartered in Palatine, Illinois, it is led by chief executive officer Chris Scherzinger who has been holding the post for the past three years. Besides charcoal grills, the company also sells electric/gas smokers and wood pellet products. The focus of the management’s growth strategy is innovation and the continued expansion of the product portfolio.

While the ongoing market reopening bodes well for the corporate world, Weber’s future prospects would depend on economic recovery and people’s spending power, since most of its products come under the consumer discretionary category. Sales could come under pressure from seasonal factors and unfavorable weather conditions. Also, the pandemic situation continues to be critical in some of the overseas markets where the company has operations.

$1.5-bln Revenue

Unlink most IPO aspirants these days, Weber is a profitable company that continues to expand its global market share – as much as 24% as per the latest estimates. In fiscal 2020, net income jumped to $88.9 million from $50.1 million a year earlier. The growth was supported by an 18% increase in revenues to $1.53 billion. The products are being sold in 78 countries, with a global installed base of 50 million.

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Earlier this month, Weber’s rival TGPX Holdings had filed for IPO, seeking to list on the New York Stock Exchange under the ticker symbol COOK.