ODDITY Tech, Ltd. (ODD) priced its upsized IPO at $35.00 – $1.00 above the top of its recently raised price range – in a deal that produced $423.68 million in proceeds, the Israeli beauty company said early today (Wednesday, July 19, 2023). A total of 12.11 million Class A ordinary shares (12,105,261 shares) were priced Tuesday night (July 18, 2023), up from 10.53 million shares in the prospectus. Selling stockholders sold 10.35 million shares (10,350,876 shares) and the company sold 1.75 million shares (1,754,385 shares), according to ODDITY Tech’s statement.
ODDITY Tech’s stock jumped $12.53 – or 35.8 percent – to close at $47.53 on Wednesday, its first day of NASDAQ trading, on volume of 6.13 million shares. The Israeli beauty company’s stock made a sparkling debut on NASDAQ – opening at $49.10 – up $14.10 or up 40.8 percent from its $35.00 IPO price – on the NASDAQ at 1:15 p.m. EDT today (Wednesday, July 19, 2023), according to NASDAQ. Volume: About 1.12 million shares. The stock pulled back slightly to trade at around $47.36 – up 35.3 percent – on volume of about 3.5 million shares within about a half hour its opening trade.
Goldman Sachs, Morgan Stanley and Allen & Company LLC were the lead joint book-runners. The book-running team included BofA Securities, Barclays, Truist Securities, JMP Securities and KeyBanc Capital Markets.
ODDITY Tech is the parent of IL MAKIAGE, a makeup brand, and SpoiledChild, an anti-aging brand of hair and skin products. The company has a market cap of about $2.03 billion, based on the pricing terms.
The highly profitable beauty company’s IPO had generated a lot of buzz among IPO investors.
Early Monday, ODDITY Tech raised the price range for its IPO to $32.00 to $34.00 – up from $27.00 to $30.00 initially – and kept the number of shares at 10.53 million. (Source: F-1/A filing dated July 17, 2023)
Selling stockholders sold another 1.58 million shares at pricing. Private equity giant L Catterton and CEO Oran Holtzman, a co-founder, were among the selling stockholders.
ODDITY Tech stands to receive only $61.4 million in IPO proceeds. The company will not receive any proceeds from the sale of the selling stockholders’ shares.
Cornerstone investors were in for an aggregate of up to $100.0 million – or about 28.7 percent of the IPO – the prospectus says. These cornerstone investors include one or more funds or trusts managed by Baillie Gifford, a fund managed by an affiliate of BDT & MSD Partners, and one or more funds managed by Franklin Templeton.
Beauty Outsider from Israel
ODDITY Tech, Ltd., based in Tel Aviv-Jaffa, describes itself as an outlier intent on disrupting the global beauty industry with its tech platform and its use of data. The company was founded in 2013 by Oran Holtzman and Shiran Holtzman-Erel, who are brother and sister. He is the CEO. She is the chief product officer.
Niv Price, ODDITY Tech’s CTO (chief technology officer), served in the Intelligence Directorate of the Israeli Defense Forces from October 1995 to December 2016.
ODDITY Tech’s first brand, IL MAKIAGE, was launched in 2018. IL MAKIAGE was the fastest-growing global beauty direct-to-consumer (D2C) platform from 2020 through 2022, according to Women’s Wear Daily, the prospectus says. IL MAKIAGE, whose products range from eyeshadow and eyeliner to moisturizer, concealer, foundation and lip color, was the fastest-growing D2C beauty brand in the United States through 2021, which is the latest available data from Digital Commerce 360.
The company says that it uses an AI-driven algorithm to help women find foundation that’s the best match for their skin tone. The company also uses data to provide product recommendations for consumers and to design products, the prospectus says.
ODDITY Tech’s second brand, SpoiledChild, was launched in 2022 with the goal of disrupting the global wellness industry. SpoiledChild specializes in anti-aging collagen products for hair and skin.
As of March 31, 2023, ODDITY Tech says it had over 4 million active customers, defined as customers who made at least one purchase within the last 12 months.
ODDITY Tech earned net income of $38.3 million on revenue of $399.8 million for the 12 months that ended March 31, 2023, according to financial statements in the prospectus.
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