The Amer Sports IPO of 2024: Arc’teryx Owner and Much More

In 2023, Courtney Dauwalter once again wrote history with her record-breaking Hardrock 100 run – a 100-mile ultramarathon run – beating the previous record by an hour and four minutes. In the same year, Mikaela Shiffrin won her 92nd World Cup race and now holds the record for most Alpine World Cup victories in history. Additionally, freeskier legend and artist Chris Bentchetler kept on inspiring the skiing and art community.

But what do these above have in common you might ask? The common denominator is: Amer Sports – owner of some of the most prominent sporting goods brands in the world. Courtney wearing Salomon head-to-toe; Mikaela using helmet, boots, and skis from Atomic; and Chris wearing Arc’teryx clothes and skiing his own signature Atomic skis.

In early January 2024, Amer Sports (ticker AS) filed for its initial public offering (IPO) on the New York Stock Exchange (NYSE). This brings us an opportunity to invest in this sporting goods company with some of the hottest brands out there. In contrast to the initially expected valuation of around $10 billion, the company went public on the 2nd of February at a $6.5 billion valuation. Let’s take a closer look at what the company actually does, starting with the complete brand portfolio.

Amer Sports’ brand portfolio is probably among the more prominent ones in the entire sporting goods industry. These are the brands it houses:

• Wilson, a leading manufacturer of equipment and apparel for sports such as tennis, basketball, and baseball.

• Arc’teryx, most known for their jackets and in some circles known as “luxury outdoor apparel”.

• Salomon, synonymous with its high-quality footwear, ranging from running and walking shoes to fashionable sneakers and iconic dad shoes. As well as other functional apparel.

• Peak Performance, one of Scandinavia’s largest clothing brands in functional sports, born in the Swedish mountains out of a deep love for skiing.

• Atomic, making and selling top-class winter sports equipment, such as boots, bindings, helmets, poles, googles, and skis.

• Armada, an athlete-focused ski brand, featuring technologically superior products designed for modern skiing.

• ENVE Composites, one of the most prominent aftermarket brands in the bike industry with its carbon fiber components.

• ATEC, the official training equipment supplier of Major League Baseball (MLB), offering products such as baseball machines, balls, nets, screens, and accessories.

• DeMarini, manufacturer of high-performance bats for baseball, fastpitch, and slowpitch, as well as accessories and apparel.

• EvoShield, offering patented custom molding protective gear for baseball, football, softball soccer, hockey and lacrosse.

• Louisville Slugger, the official bat of Major League Baseball (MLB), producing almost two million bats per year and being used by 80% of all hitters in the US baseball hall of fame.

Here’s a visual breaking down the revenue by brand:

Amer Sports revenue growth by brand since 2020.

Amer Sports revenue growth by brand since 2020.

Amer Sports has taken lots of different turns during its over 70-year history before eventually focusing solely on the sporting goods industry. The company was established in Finland in 1950 as Amer-Tupakka, initially being a tobacco manufacturer and distributor, and by the mid-1960s it expanded into shipping. It then entered the publishing and printing industry in 1970 through the acquisition of Weilin+Göös, a division that was a part of Amer for over 25 years.

The first involvement of Amer in the sporting goods industry was in 1974, when the company acquired Koho-Tuote, a manufacturer of hockey sticks and protective equipment that was used by the best players in the world at that time. Wayne Gretzky being one of them.

Three years later, in 1977, the company went public on the Helsinki Stock Exchange, and in 1984, it was also listed on the London Stock Exchange. Then, during the late 1980s through the 1990s the company started to zero in on the sporting goods industry. This by acquiring McGregor Golf Company in 1986 (divested in 1997); Wilson in 1989; Atomic in 1994; Suunto in 1999 (divested in 2022); DeMarini in 2000; and Precor in 2002 (divested in 2021). By 2004, the company had divested all of its tobacco interests and changed name to Amer Sports.

Then, beginning a new growth phase, Amer intensified its international expansion in 2005 by acquiring Salomon and Arc’teryx. Since then, Louisville Slugger, ENVE Composites, Armada, and Peak Performance have been welcomed into the group, forming its current structure.

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Amer Sports was bought from Nasdaq Helsinki on September 5, 2019, for a sum of $5.9 billion, becoming a part of a consortium consisting of ANTA Sports, FountainVest Partners, Anamered Investments, and Tencent. Below, ANTA sheds light on Amer's recent developments.

Page 20 in ANTA Sports Products’ H1 2023 Presentation

As of January 2024, Amer Sports employs almost 11,000 people and sells products in over 100 countries. The price tag for the upcoming IPO is still unknown, but with its $3.5 billion in revenue 2022 (16% growth year-over-year), gross margins slightly above 50%, and a current EBIT margin of 8% (first nine months of 2023) – there’s speculation of a valuation at around $10 billion.

With its current run-rate, growing sales by 29.9% in the first nine months of 2023, full year sales will likely end up around the $6 billion mark (full year numbers not released yet). Maintaining an EBIT margin of 8% would translate into approximately $480 million for the full year of 2023. As of February 2024, Amer’s market cap of $7.7 billion implies a P/EBIT of around 15x for the estimated full year of 2023.

Comparing this to other recent IPOs – like for example that of Birkenstock – could provide a clue on how to look at this. Birkenstock went public at a $8.6 billion valuation, and with its trailing twelve months (TTM) sales of almost $1.6 billion, and an EBIT margin of 24.5% (as of Q3 2023), the company is as of January 2024 valued at a P/EBIT of around 23x. Is this a reasonable price tag to pay? Only time will tell.

Amer Sports’ 2024 IPO presents an opportunity to invest in a company with an over 70-year history. Going from being a tobacco manufacturer and distributor to today having a strong portfolio of brands like Arc’teryx and Salomon, and partnerships with top athletes, Amer Sports’ could be well positioned for continued growth.