Beauty Company Oddity Jumps in Debut After $424 Million IPO

Beauty and wellness company Oddity Tech Ltd. rose 36% in its trading debut after upsizing its initial public offering to raise $424 million, adding momentum to a listings rebound in the US.

(Bloomberg) — Beauty and wellness company Oddity Tech Ltd. rose 36% in its trading debut after upsizing its initial public offering to raise $424 million, adding momentum to a listings rebound in the US.

Shares of the Tel Aviv-based company opened trading Wednesday at $49.10 after selling for $35 in the IPO. The shares closed at $47.53 in New York, giving Oddity a market value of about $2.7 billion.

Oddity, along with its founder and backer L Catterton, sold a combined total of 12.1 million shares Tuesday after marketing 10.5 million for $32 to $34, a range it already had elevated on Monday. 

Including employee stock options, the company’s fully diluted value of more than $3.1 billion. That compares with a valuation of $1.44 billion in connection with a secondary transaction in January 2022, according to data provider PitchBook. Earlier investors in the company included Thomas Tull, Franklin Templeton, Fidelity Management & Research Co. and First Light Capital Group.

“The combination of a scaled business that’s growing quickly and profitable – that is what investors are looking for,” L Catterton’s Michael Farello said in an interview. A managing partner focused on the growth fund, Farello said the private equity firm had sold some of its shares privately earlier, when new investors were brought in before the IPO.

Cava, Surf Air

Oddity adds to a string of consumer-oriented companies going public after a year-plus dearth of US listings. Since raising $365 million including so-called greenshoe shares in June, fast-casual restaurant Cava Group Inc.’s stock price has more than doubled. Discount retailer Savers Value Village Inc.’s IPO the following week raised $401 million, with its shares up 36% from their offer price.

The success of those IPOs and Oddity’s could spur other companies such as Fogo Hospitality Inc.  and Fat Brands Inc.’s Twin Peaks sports bar business to move ahead with listings. Alternative air carrier Surf Air Mobility Inc. plans to go public next week through a direct listing.

Still, the $13.4 billion raised by 90 companies on US exchanges since Jan. 1 is down from a total of $18.8 billion at this point last year and is only about 6% of the total as of July in 2021, which set an all-time record for IPOs, according to data compiled by Bloomberg.

Making Money

Oddity, whose brands include Il Makiage and online-only wellness brand SpoiledChild, is making money. The direct-to-consumer retailer had net income of $21.7 million on net revenue of more than $324 million in 2022, an increase from $13.9 million on more than $222 million in revenue the previous year, according to the filings.

“We’re clearly in a place where the markets appear to be healing,” Oddity Chief Financial Officer Lindsay Drucker Mann said in a Bloomberg TV interview.

“The market isn’t open for every company,” she added.

Oddity founder and Chief Executive Officer Oran Holtzman and L Catterton sold about 10.4 million of the shares in the IPO, the company said. Holtzman will own almost all of Oddity’s Class B shares, giving him about three-quarters of the voting power, according to the company’s filings.

The offering was led by Goldman Sachs Group Inc., Morgan Stanley and Allen & Co. Oddity’s shares are trading on the Nasdaq Global Market under the symbol ODD.

–With assistance from Bailey Lipschultz and Jeannette Neumann.

(Updates with CFO’s comment in 10th paragraph.)

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