Permira picks good time to flog some Dr. Martens

Dr. Martens boots are seen in London, Britain, September 17, 2020. REUTERS/Simon Newman

LONDON, Jan 6 (Reuters Breakingviews) – Permira has picked an opportune moment to offload some of its Dr. Martens (DOCS.L). The buyout firm sold a chunk of its shares in the $5 billion British bootmaker on Thursday at a 6% discount to the previous day’s closing price, thus reducing its holding to 36% from 42%. Dr. Martens has enjoyed a solid run since its initial public offering a year ago, meaning Permira can take the reduced price in its stride.

Permira raised about 257 million pounds from the sale, which took place at 395 pence per share, comfortably above the stock’s 370 pence IPO price. With a chunky residual stake, the private equity house demonstrates confidence in the future. Thursday’s 9% drop in Dr. Martens shares suggests other investors may not. Retailers are battling supply chain problems and inflation. Dr. Martens’ annual revenue growth is set to slow over the next two years to 14%, according to Refinitiv forecasts, from 48% in the year to March 2020. Permira’s partial exit was well timed. (By Karen Kwok)

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Editing by Ed Cropley and Oliver Taslic