Oddity Tech Ltd. (Nasdaq: ODD), the parent company of Israeli online cosmetics brand IL Makiage, trades on the Nasdaq Stock Exchange at a valuation of $2 billion. The cosmetics company, which was heavily in debt a decade ago, has reinvented itself as a consumer-technology platform designed to transform the global cosmetics market, is growing and profitable, and is enjoying high demand for its new shares on Wall Street.
Oddity originally talked about the IPO price range of $27-30 per share, then raised it to $32-34, and finally priced the shares at $35. In total $423 million worth of shares were 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.
Holtzmann, a young accountant, sought an investment opportunity and was referred to IL Makiage, which was NIS 40 million in debt. He went for it and paid the company 10 million shekels (out of a total investment of 12 million shekels) – the bulk of it was financed with loans, and part of it was financed by the mortgage on his apartment.
Together with his sister, Sheeran Holtzman-Erell, who holds the position of product manager, they built a strategic plan for the company. With L. Catterton, the company went online, and its website was branded a shopping site that addresses an international audience and allows customers to tweak makeup based on machine learning models.
To redefine the industry
In the prospectus, the company says it is well-positioned to take on the market, with its tech consumer platform, which is designed to redefine the industry to move from wholesale, outsourcing models, one product fits all and focused on efficiency, digital sales, direct sales, vertical models, customized and data-driven products.
The small part of the bid on Wall Street was raising capital for the company itself — roughly 1.8 million new shares were issued, which will inject $61.4 million into Oddity’s coffers. Before the IPO, the company 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 value of the offering was supposed to be $307 million, Holtzman’s share was $179 million, and L Catterton’s share was $128 million. However, in the end more shares were sold, so it can be assumed that Holtzman sold shares for $211 million, and L. Catterton sold shares for $151 million. After the sale, Holtzman owns more than $680 million in Oddity shares, and L Catterton owns more than $485 million in shares.
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Online cosmetics company IL Makiage sells 9% stake for $130 million
The sale of Holtzmann and L. Catterton shares took place at the beginning of 2022, when in a secondary transaction they sold 9% of the shares for $130 million at a $1.5 billion company valuation.
The selling of Holtzmann and L. Cattermole shares could increase 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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