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January 21, 2006
Online Tire Vendor Delticom Mulls IPO
Who would have thought that selling tires over the Internet could be a Euro 128M ($150M) a year business in Europe? Rainer Binder und Dr. Andreas Prüfer, the founders of Germany's Delticom, that's who. Both are former executives of tiremaker Continental.
The firm recently mandated two investment banks to explore an IPO and "other options" for expansion.
Over the past five years they built Europe's largest online tire sales company. Delticom launched in the US market in December after opening 56 online shops that operate in 25 countries.
The last time we talked to the CEO, he said that the business was “extremely profitable” and he believed that his profit margin is better than Amazon's.
Delticom has raised a mere Euro 3M from DVC Deutsche Venture Capital, of Munich, back in 2000. DVC now owns 10% of the company. About a year ago, Delticom relinquished another small percentage of shares to two German banks to boost "the number and diversity of shareholders", according to Pruefer.
An IPO on the German stock market is one possibility the firm is preparing for, but not the only one. Private equity investors could also provide the founders the kind of capital required. in Europe, buyout houses have been raising record amounts of capital and they are in fierce competition for assets in Germany.
We think it is quite possible that they would offer Delticom a better price for its equity to finance growth plans than the valuation it would get on the public market.
Besides selling tires online, Delticom sells autoparts and oil
Read - Delticom financial results 2005 (Presseportal in German only)
Posted on January 21, 2006 09:46 AM | Posted to IPO | eCommerce | Permalink
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