Oddity Tech Ltd. (Nasdaq: ODD) , the parent company of Israeli online cosmetics brand IL Makiage, is beginning trading on Nasdaq at a company valuation of $2 billion. The cosmetics company, which a decade ago, was weighed down by debt, has reinvented itself as a tech-consumer platform designed to change the global cosmetics market, and is growing and profitable, and enjoyed high demand for its new shares on Wall Street.
Oddity originally spoke about an IPO price range of $27-30 per share, then raised it to $32-34 and finally priced the shares at $35. In total shares worth $423 million have been sold.
Oddity's controlling shareholders are CEO Oran Holtzman, who first invested in the company a decade ago, and private equity firm L. Catterton, which invested $95 million in 2017 for a 38.5% stake.
Holtzman, a young accountant, sought an investment opportunity and was referred to IL Makiage, which then had debts of NIS 40 million. He went for it and paid NIS 10 million for the company (out of a total investment of NIS 12 million) - the significant part of which was financed by loans, and part of which was financed by mortgaging his apartment.
Together with his sister, Shiran Holtzman-Erel, who is chief product officer, they built a strategic plan for the company. With L. Catterton, the company's online activity was launched, and its website was branded as a shopping site that addresses an international audience and allows customers to adjust makeup based on machine learning models.
To redefine the industry
In its prospectus, the company says it is well placed to conquer the market, with its tech-consumer platform, which is built to redefine the industry to transition from offline, wholesale sales, outsourcing models, and one product that fits all and focus on efficiency, digital, direct sales, vertical models, and customized and personalized products based on data.
The small part of the offering on Wall Street was raising capital for the company itself - close to 1.8 million new shares were issued, which will inject $61.4 million into Oddity's coffers. Before the IPO, the company's had $110 million dollars. At the same time, the controlling owners of the company sold some of their shares.
According to the original plan, the flotation was supposed to amount to $307 million, with Holtzman's share amounting to $179 million dollars, and L Catterton's share to $128 million. However, in the end more shares have been sold, so it can be assumed Holtzman sold shares for $211 million, and L. Catterton sold shares for $151 million. After the sale, Holtzman holds more than $680 million in Oddity shares, and L Catterton holds more than $485 million in shares.
A sale of shares by Holtzman and L Catterton was carried out at the beginning of 2022, when in a secondary deal they sold 9% of the shares for $130 million at a company valuation of $1.5 billion.
The sale of shares by Holtzman and L. Catterton could grow because the underwriters have options to buy 1.8 million shares within 30 days.
Published by Globes, Israel business news - en.globes.co.il - on July 19, 2023.
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