Oriflame to return to public markets

Industri Kapital portfolio company Oriflame Cosmetics is launching an IPO which could provide a boost to the firm’s fund raising efforts for its fifth fund. The board of directors and shareholders of Oriflame will offer shares through an IPO of 20,769,500 Swedish Depositary Receipts which have been approved for listing on the O-List of the Stockholm Stock Exchange. The price range is set at SEK165-200 per share and the subscription period will run from 11-23 March with the first day of trading on 24 March.

This is the second time Oriflame has gone down the IPO route. Industri Kapital backed the business in 1999 in a public-to-private transaction when it delisted the company from the London Stock Exchange. Industri Kapital’s 1997 Fund paid €90m for a 39% stake in the company. Post IPO this will be reduced to a 21% shareholding with a 180 day lock-in period.

Oriflame is a manufacturer of high quality skin care, fragrances and colour cosmetics. Its products are marketed through a sales force of over 1.4m independent sales consultants. Since the buyout in 1999 the company’s sales have doubled and operating income has grown by 170%. In 2003, the company’s revenues increased by 20% to €652m, operating profit increased to €114m and the company generated a net profit after tax of €89m, equivalent to a net profit margin of 13.6%.

Industri Kapital is currently seeking €2.5bn for its fifth fund, which held a first close in October at €500m. The fund is the successor to the €2.1bn IK 2000 fund. There have been a handful of companies seeking to raise funds from the public markets of late signalling a long-awaited recovery of the stock markets. Last month Industri Kapital cashed in on its remaining 25% stake in Stockholm-listed kitchen manufacturer Nobia, achieving a reported return of almost eight times.