Dufry bets growth on IPO

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The Dufry Group announced earlier today that it intends to fund future growth by use of an initial public offering (IPO) on the Swiss Stock Exchange ‘during the coming weeks’.

The Basel-based travel retailer with sales of Swf.850.5m ($659m) in 2004 plans an offering of secondary shares by private equity funds managed by its part-owner Advent International, plus an offering of primary shares, although no further details were available at present.
However, the retailer made it clear in its press statement that the primary offering is ‘intended to be used to facilitate the company's continued growth’. This would suggest that a majority offering of shares is unlikely to be made available to institutions or the public.
Dufry Ceo Juli?n Diaz Gonz?lez said: ‘Dufry has successfully established itself as one of the world's leading global travel retailers with a comprehensive product offering, a strong operating platform and a high quality, diversified concession portfolio. The planned IPO on the SWX is the next logical step in the profitable growth of our business and the continuation of our success story.’
It also comes at a very logical time, since the company has never been healthier than it is today following Advent International, Grupo Areas of Spain and other co-investors' acquisition of Dufry (previously known as Weitnauer in another life) in March 2004.
The company said that Credit Suisse First Boston has been appointed sole global coordinator and bookrunner for the offering, with ING acting as co-lead manager and Sarasin and Vontobel acting as co-managers.
Dufry said that the precise timetable, size and structure of the proposed IPO will be made known ‘in due course’.
As of September 30,2005, Dufry operated 292 shops on four continents with a total sales area of 51,214sq m. Its empire comprises 198 shops at airports, 34 on cruise lines and ferries and at seaports, five shops in railway stations, plus another 55 at downtown tourist and other locations.
The company has been well led and well organised by Diaz since the takeover and he has also built a very good team around him in a very short space of time, ‘borrowing’ several senior executives from Aldeasa along the way and even bidding to take Aldeasa over earlier this year.
The company showed dignity in defeat after Autogrill and Altadis eventually won control of Aldeasa and Dufry's refusal to be drawn into a bidding auction with its rival showed measured wisdom. This is a very different company from what was once known as Weitnauer and it is a real force to be reckoned with.
With sales of Swf.850.5m ($659m) Dufry was the fourth largest duty free and travel retail operator (not airport) in the world behind Nuance, DFS Group and World Duty Free in 2004. The company also looks to be on target to beat its 2004 sales total this year, having already posted half-year sales of Swf.425.3m ($329.5m) this year, a 7.7% increase on half-year sales against the comparable period in 2003.Asked only a month ago by The Business if he believes there will be more industry consolidation on the retail side between duty free and travel retailers in the future, Diaz said: ‘Yes, I believe that there will be further consolidation in the market. We have been seeing consolidation at supplier; airports organisations etc. I believe the future global travel retail operator should look for these type of opportunities.’ (Watch this space-Ed).

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