Fix Price, one of the leading variety value retailers globally and the largest in Russia, has successfully priced its IPO on the Main Market of the London Stock Exchange at $9.75 per GDR, the top end of the previously announced price range.
The IPO was upsized following strong investor demand to $2bn, giving Fix Price a market capitalisation of $8.3bn.
This means that the Fix Price IPO becomes (source: Dealogic):
- The largest Russian IPO on the London Stock Exchange since 2007;
- The biggest IPO in history by a Russian retailer on any stock exchange;
- The second biggest IPO ever by any retailer on the London Stock Exchange, and the biggest IPO of a retailer on the LSE since 2006;
- The largest international IPO on the LSE since 2017.
bne IntelliNews previously profiled the company with an interview with the company’s CEO Dmitry Kirsanov prior to the IPO in October last year.
“It is no exaggeration to say that today’s announcement represents a landmark in the history not just of Fix Price, but also for value variety retail and the Russian retail sector more broadly, as the largest ever IPO by a Russian retailer. We are delighted with the extremely strong interest from the global investor community, which resulted in a strong and diversified order book including a number of blue-chip names and enabled us to upsize the offer beyond our original expectations. I would like to extend a warm welcome to all our new shareholders as they join the Fix Price family, and look forward to the next chapter in the exciting Fix Price story,” Dmitry Kirsanov, CEO of Fix Price said in a press release.
The company released details of the IPO and its operations in a press release:
Confirmation of Offer details:
- The Offer Price has been set at USD 9.75 per GDR.
- Based on the Offer Price, Fix Price’s total market capitalisation on Admission will be approximately USD 8.3 billion.
- The Offer consists of an offering of 178,372,354 GDRs, each representing one ordinary share of the Company, equating to a total base offer size of approximately USD 1.7 billion and representing approximately 21.0% of Fix Price’s total issued share capital on Admission.
- In addition, a further 26,755,852 GDRs are being made available by certain selling shareholders, pursuant to the over-allotment option. If allocated in full, the number of publicly traded GDRs would increase to 205,128,206, representing approximately 24.1% of Fix Price’s total issued share capital.
- As previously announced on 1 March 2021, QIA,1 funds and accounts managed by BlackRock, GIC and APG2 have each entered into cornerstone agreements with Fix Price containing commitments, subject to certain conditions, of USD 150 million, USD 150 million, USD 100 million and USD 75 million, respectively, in total amounting to USD 475 million, to acquire GDRs in the Offer at the Offer Price.
- Full details of the Offer will be included in the Prospectus, which, when published, will be available on the Company’s website at https://ir.fix-price.com/ and on the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
- Conditional dealings in the GDRs are expected to commence on the London Stock Exchange at 8:00 a.m. (London time) on 5 March 2021 under the ticker “FIXP”. Investors should note that only those who applied for and were allocated GDRs in the Offer will be able to deal in the GDRs on a conditional basis.
- Admission to the standard listing segment of the Official List of the FCA and to trading on the Main Market for listed securities of the London Stock Exchange and Moscow Exchange, and the commencement of unconditional dealings is expected to take place at 8:00 a.m. (London time) on 10 March 2021. On 20 February 2021, Moscow Exchange approved the inclusion of the GDRs in the Level 1 segment of its quotation list.
- In connection with the Offer, each of the Company, the selling shareholders, senior management of the Group and certain other shareholders of the Company have agreed to lock-up arrangements restricting the disposal of the Company’s securities for a period of 180 days (in the case of the Company, the selling shareholders and certain other shareholders of the Company) and 365 days (in the case of the senior management of the Group) from the date of Admission.
- BofA Securities, Citigroup, J.P. Morgan, Morgan Stanley and VTB Capital (each as defined below) have been engaged by the Company to act as Joint Global Coordinators and Joint Bookrunners.
About Fix Price
- Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has grown rapidly in recent years, with revenue of RUB 190.1 billion, RUB 142.9 billion and RUB 108.7 billion for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8 billion, RUB 27.2 billion and RUB 14.2 billion, respectively. Net income for the same years was RUB 17.6 billion, RUB 13.2 billion and RUB 9.1 billion, respectively.
- Fix Price occupies a separate niche to traditional discounters. Fix Price’s stores provide an affordable shopping destination, offering customers a broad range of essential and unique products at multiple fixed price points, all under RUB 250 (ca. US$3.40).
- Fix Price’s pricing policy capitalises on a structural shift towards value among consumers worldwide, which Fix Price believes allows it to benefit in almost any economic environment, most recently during the COVID-19 pandemic. In 2020, Fix Price reported double-digit quarterly like-for-like sales growth every quarter and FY like-for-like sales growth of 15.8%.
- The variety value retail market is one of the fastest-growing segments in Russian retail and is expected to triple in size by 2027 with a CAGR of 16.9% for 2019-2027, according to an independent industry consultant report. The market has more than doubled its size over the past five years, albeit still at a low base compared to other countries, suggesting further significant potential for growth.
- In the Russian variety value retail market, Fix Price is the leader both by number of stores and revenue. According to an independent industry consultant report, Fix Price was estimated to account for 93% of the Russian variety value retail market by revenue in 2019, and had by far the largest number of stores among Russian variety value retailers.
- Today there are more than 4,200 Fix Price stores primarily in Russia, as well as in neighbouring countries (Belarus, Kazakhstan, Uzbekistan, Kyrgyzstan, Latvia and Georgia), all of them stocking approximately 1,800 SKUs across around 20 product categories. In addition to its own private brands, Fix Price sells products from leading global names and smaller local suppliers. Fix Price’s wholesale operations service a number of franchisees operating in Russia, Belarus, Georgia, Kazakhstan, Kyrgyzstan and Latvia.
- Fix Price has an efficient and easily scalable business model, which is underpinned by the following key pillars: data-driven procurement, streamlined centralised logistics, efficient and standardised store management, and a highly experienced management team. State-of-the art IT solutions enable Fix Price to achieve a high degree of automation across its operations.
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