Levi Strauss & Co. : IPO out, share valued at $14- $16

 Levi Strauss & Co. a San Francisco based company founded in 1853, has come a step closer in becoming a publicly traded company once again. On monday the blue jeans giant company filed a plan for an initial public offering (IPO).

Levi's IPO will raise as much as $587 million, 36.7 million shares will be sold at a price of $14-$16.The company will have 385.5 million shares outstanding following the offering.

Following the IPO, the company could be valued as high as $6.2 billion. This will make the company far more valuable than some of its peers like American Eagle Outfitters (AEO) which is valued at $3.7 billion. An initial public offering day for the San Francisco-based blue jeans giant hasn’t been announced, but the company will trade under the symbol LEVI.

Despite the value of the brand, the public offering is being underwritten by Goldman Sachs, J.P. Morgan, and Morgan Stanley.

The 166 years old company traded publicly in 1971 before but it went private in 1985. The company was in a situation of debts few years ago but in 2011 when Chip Bergh became the CEO, the situations improved. Not only did the growth of the company grow but Bergh also made the it a value driven company by extending support to social issues like gun violence prevention and climate change prevention.

The sales are increasing at an annual rate of 2.3%, from $4.8 billion in its fiscal year 2011 to $5.6 billion in last year. Net income has grown swiftly, at 11.3% a year, from $135 million to $285 million over the same period.

The company runs 831 of its own stores and its products are sold in over 50,000 retail locations.

“The valuation is fair and as expected. It is also a good time for Levi’s to go public due to the resurgence of 80s’ blue jeans fashion, ” said Eric Schiffer, chief executive officer of California-based private equity firm Patriarch Organization.

Schiffer, who picks up stakes in new ventures, said he was interested in grabbing a share of Levi’s when it goes public. The descendants of founder Levi Strauss, the Hass family, will retain 80 percent of voting control in the company following the IPO, the filing showed.

To attract young customers, Levi’s also plans to expand its tailor shop and print bar that allow consumers to customize and put their own designs on the company’s branded jeans and T-shirts. The next step for the company will be investor roadshow, during which it will pitch its case to potential investors and gauge demand for its stock. The date for IPO has not been set yet but will probably come within few weeks.

Current rating: 5