Bloomberg: Israeli lingerie manufacturer Delta Galil Industries is planning an IPO in the U.S

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by Ifi Reporter Category:Financial Oct 1, 2021

Israeli lingerie manufacturer Delta Galil Industries, whose shares are traded on the Tel Aviv Stock Exchange, is planning an IPO in the United States, Bloomberg reported from people close to the matter.
The company is working with Bank of America on the issuance plans, and aims to issue at a value of about $ 2 billion, according to the sources, who asked to remain anonymous because the information is private.
According to the sources, the company's issue, which owns, among others, the American clothing brands Bare Necessities and 7 for All Mankind denim, may take place later this year. Representatives from Delta Galil and the Bank of America declined to comment.
In the past year, Delta Galil shares have almost tripled in Tel Aviv, and its market value has reached NIS 4.1 billion ($ 1.3 billion).
Delta Galil, which was founded in 1975, was previously traded on the NASDAQ, but was deleted from trading there in 2008. The industrialist and businessman Dov Lautman owned it, but sold it in 2007 to Isaac Dabach.

In its early months, the corona crisis hit the Galilee Delta hard. The company recorded a loss of $ 30 million in the first quarter of 2020, and a second loss of $ 53 million in the second quarter of 2020.
However, since the low point, Delta shares have soared by 370% to a company value of NIS 4.1 billion. Investors have noticed that the company's comprehensive streamlining plan - worth $ 39 million - has turned the bitter lemon situation into a lemonade. Delta Galil closed some manufacturing operations in China, Egypt, Turkey and Eastern Europe, reduced headquarters in Europe, the United States and Israel, expelled a large number of workers worldwide, reduced executive expenses and rent payments, and sweepingly reduced unnecessary investments and expenses .
In addition, the company reduced salaries for consultants and service providers, expanded payment terms to suppliers, canceled dividend distributions in 2020, utilized $ 66 million in bank credit facilities and received a $ 30 million state-guaranteed loan from banks in Israel and Switzerland. An online sales channel thus boosted profitability.
The company has used the tremendous growth engine of the digital world and has developed websites for every brand it sells and at the same time enjoyed the fact that its customers are strong Internet customers and it has strengthened its cooperation with them over the years. The company even enjoyed the boiling of the sportswear industry due to the fact that it manufactures the clothing without a few well-known sports brands like Nike, Under Armor and Lulu Man. Following these moves, the fashion manufacturer emerged strengthened from the crisis with its hand on the top.
Delta Galil closed the second quarter of 2021 with revenues of approximately $ 456 million, 68% more than the corresponding quarter in 2021. Organic sales excluding revenues from the Company's acquisition of Bare Necessities grew by 56%.
The company's online sales jumped 97% to $ 63.3 million, and Delta Galil's gross profit rates presented to investors climbed to an all-time high of 41.4%. The company's net profit in the second quarter of 2021 was $ 27.3 million compared to the $ 53.3 million loss that Delta presented at the height of the Corona crisis in the second quarter of 2020 due to the closures.
Delta managed to shrink its net financial debt to its lowest level since June - $ 124.6 million and distributed a $ 5 million dividend to investors on August 18th. In order to flatten the debt payment curve and extend the duration of the loan, Delta Galil made a full redemption of its Series B debentures, on August 23, 2021, for a total amount of approximately $ 115 million, through loans from banks, from the remaining $ 280 million in cash. At the end of the second quarter of 2021, and unutilized credit facilities amounting to $ 180 million.
The excellent reports allowed the company to exceed its forecasts and expect that in 2021 it will conclude with revenues of $ 1.825-1.875 billion, about 8% -11% more than the revenues it presented in 2019, before the corona period, and they totaled $ 1.69 billion .
Operating profit for 2021 is expected to range between $ 160-170 million, an increase of 14% compared to the previous forecast and 51% -60% compared to operating profit in 2019 which amounted to $ 106.0 million. EBITDA for 2021 is expected to range from $ 260 million to $ 270 million, an increase of 8% compared to the previous forecast and 38 %% - 33% compared to EBITDA in 2019, which amounted to $ 195.6 million. Net income in 2021 is expected to range from $ 96 million to $ 104 million, an increase of 17% compared to the previous forecast and of 59% -73% compared to a net profit of $ 60.2 million in 2019.
Delta is taking advantage of the hot momentum it is in to return to NASDAQ. On August 5, the company reported to investors in Tel Aviv that on August 16, it plans to file a confidential prospectus for NASDAQ ahead of the IPO.

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