Complete Guide To Weber IPO

2021 proved to be a record-setting period for private companies launching their initial public offerings (IPOs). In fact, through the first half of the calendar year, the IPO market approached record levels for annual proceeds while eclipsing previous benchmarks for listings. From 1 January 2021 to 26 July 2021, the money raised by IPOs hit US$89 billion, up 232% year over year. Also, the number of listings jumped to 250, shattering 2020's total of 218.[1]))

Companies from all sectors were featured in the IPO rush, including the fintech, health care, consumer, retail and manufacturing sectors. The list of household names that went public during this time included Coinbase (COIN), Robinhood (HOOD) and Coupang (CPNG). Not to be left out of the IPO boom were American grill makers Traeger (COOK) and Weber Inc. (WEBR).

What Is Weber?

Weber Inc. is an American grill maker that specialises in the design and manufacture of outdoor BBQs and accessories. Based outside of Chicago, Illinois, Weber's core business is the construction of gas, charcoal, wood-pellet, electric, and portable grills. The company's product lineup caters to a diverse international clientele:

  • Gas: Models include the Smart Series, Genesis II Series and Spirit Series. Prices range from US$189 to US$3,000.[2]
  • Charcoal: Models include the Summit Kamado, Smokey Joe and Master Touch. Prices range from US$35 to US$2,000.[3]
  • Wood Pellet: Models include the SmokeFire EX4 and SmokeFireEX6, priced from US$750 to US$1,000. Also, Weber manufactures a variety of related accessories such as gloves, flavored wood pellets and cutting boards.[4]
  • Electric: Models include the Weber Q 1400, Weber Q 2400, and Pulse 2000. Prices range from US$275 to US$900.[5]
  • Portable: Models include the Smokey Joe, Jumbo Joe, Go-Anywhere and Weber Traveler. Prices range from US$45 to US$325.[6]

Financially, Weber has been an exceedingly effective company. The firm credits its 40-year, 10% annual growth rate to its business model's core strategies:[7]

  • Introduce new and disruptive products
  • Focus on customer-direct and e-commerce revenue
  • Cultivate new customers and revenue streams
  • Expand into emerging markets
  • Execute value-added operational initiatives

From a marketing standpoint, Weber makes their grills available to the public via direct online sales and through retail vendors. To further the corporate profile, the company has branded a collection of Weber Grill Restaurants and promotes the Weber Grill Academy.

Weber Grill Restaurants

Weber has locations in five U.S. cities in the Midwest: Chicago (Illinois), Indianapolis (Indiana), Lombard (Illinois), Schaumburg (Illinois) and St. Louis (Missouri).[8] Menu items range from traditional BBQ staples such as beef, pork, and chicken to seafood and plant-based alternatives.[9]

Weber Grill Academy

The Weber Grill Academy offers customers the opportunity to learn how to prepare BBQ cuisine from professional chefs. There are in-person and online classes available.[10]

American Made With Global Reach

Weber takes pride in its American roots and history, as evidenced by its "Made In The Heart Of America" manufacturing mantra. Founded in 1951 by metal worker George Stephen, Weber has been in the grill business for nearly 70 years.[11] Formally incorporated as Weber-Stephen Products in 1958[12], the Weber brand has built an extensive global reach:[7]

  • The company has secured an industry-leading 24% international market share
  • Weber boasts a community of more than 50 million customers around the world
  • Products are sold in 78 countries
  • Nearly 50% of sales originate outside of the USA

Weber Inc. is led by Chief Executive Officer (CEO) Chris Scherzinger and Chief Financial Officer (CFO) Bill Horton.[7] The company goes by the legal name Weber-Stephen Products LLC.

Weber's S-1 Filing

Since its incorporation in 1958, Weber has benefited from steady growth, aggressive corporate financial policies and strong capital backing. Weber's private investor list is headed up by a partnership with BDT Capital Partners, which has a controlling interest in the company.[13]

While the company was privately held for more than 60 years, the COVID-era equities market boom of April 2020 through July 2021 made going public extremely attractive. In an attempt to capitalise on this opportunity, Weber leadership filed its Form S-1 with the U.S. Securities and Exchange Commission (SEC) on 12 July 2021. On the S-1, the company publicly disclosed several pieces of pertinent information:[14]

  • The company was to be listed on the New York Stock Exchange (NYSE) under the ticker symbol WEBR.
  • Weber's wholesale network consisted of 4,710 retailers and 31,690 physical locations. Key distributors were Costco, The Home Depot, Lowe's and Walmart.
  • An annual revenue growth rate of 47% was realised from 2018 through 2020.
  • Weber is the number-one outdoor cooking brand on Amazon.com. This ranking stemmed from Weber securing 29% of the aggregate outdoor cooking category marketshare in 2020.
  • The company generated US$1.5 billion in annual revenue for 2020.
  • Lead underwriters for the IPO were listed as Goldman Sachs, Citigroup, UBS, Bank of America, Wells Fargo, J.P. Morgan and KeyBanc Capital Markets.

In the S-1, Weber put forth a collection of financial data comparing the six months ended 31 March 2021 to the six months ended 31 March 2020. Below is a look at several of the most important metrics:[14]

  • Gross revenue increased from US$596.4 million to US$963.3 million, a gain of 62%.
  • Operational income increased from US$56.4 million to US$120.9 million, a gain of 114%.
  • Net income grew from US$23.6 million to US$73.8 million, an uptick of 213%.
  • Earnings before interest, taxes, interest, depreciation and ammoritisation (EBITDA) rose from US$69.0 million to US$141.3 million, a spike of 105%.
  • Additionally, Weber disclosed positive year-over-year gains in revenue, income, net income and EBITDA for fiscal year 2020.

Given their diverse international customer base, business model, marketshare and 2020/21 performance, Weber had strong expectations from the IPO. In a 27 July 2021 press release, the company publicly disclosed its targets:[13]

  • Approximately 46.88 million shares were to be sold.
  • Prices were to range between US$15 and US$17 per share.
  • Proceeds from the IPO were to approach US$797 million.
  • A corporate valuation of approximately US$5 billion was to be achieved.

Weber's IPO Launch

Weber Inc. (WEBR) officially went public on 5 August 2021. Unfortunately for private investors and management, the company decided to cut the size of the IPO and widely miss its late-July projections. In total, just under 18 million WEBR shares were sold at a price of US$14 per share. Subsequently, the company raised in the neighborhood of US$250 million, far less than the upside estimates of US$797 million.

Comparatively, Weber's IPO fell well short of industry contemporary Traeger Pellet Grills (COOK). In a late-July offering, Traeger raised US$424 million in their Wall Street debut. However, despite the weaker-than-expected IPO price, shares of WEBR rallied 18% to close their first full day of trade at $16.50. The performance earned the company a valuation of just short of US$4 billion and indicated that significant public demand for WEBR shares was present in the market.[16]

Summary

Weber Inc. is a storied American grill maker headquartered in the greater Chicago, Illinois area. Founded by George Stephen in the early 1950s, the company was officially incorporated as Weber-Stephen Products LLC in 1958. It is a global leader in the design, manufacture and sales of outdoor grilling products. As of 2020, Weber grills were sold in 78 countries, generating US$1.5 billion in revenue.

Weber officially launched its IPO on 5 August 2021. At the offering, 18 million shares of WEBR common stock were sold on the NYSE at US$14 per share. Gross proceeds came in at US$250 million, earning the firm a valuation just short of US$4.0 billion.

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