Written by Norman Isaac Mwambazi

What you need to know about the Olaplex IPO expected this week

A host of companies have decided to go public this year in a move intended to raise capital through floating …

A host of companies have decided to go public this year in a move intended to raise capital through floating their shares on the stock exchange. Companies like cryptocurrency exchange Coinbase Global Inc. (ticker: COIN), Chinese ride-hailing company Didi Global Inc. (ticker: DIDI), and stock brokerage firm Robinhood (ticker: HOOD), among others, all had their Initial Public Offering (IPO) debuts this year, and in a few days from now, we will add Olaplex Holdings Inc. on that list.

On August 27, 2021, Olaplex filed documents to the Securities and Exchange Commission (SEC) about a planned IPO for its shares of common stock. Olaplex’s two institutional shareholders hold all these shares; Advent International Corporation and Mousse Partners Ltd.

Olaplex has since submitted two amendments to the original S-1 registration form to the SEC, with the second submitted on Tuesday, September 28, 2021. None of the documents indicates when the company will debut on the stock exchange, but this is expected to happen sometime this week, with the company’s shares listed on the Nasdaq Global Select Market tier of the tech-heavy Nasdaq Stock Market. Olaplex will trade under the ticker symbol OLPX.

According to SEC documents, Olaplex’s two shareholders Advent International Corp and Mousse Partners Ltd, will offer 67 million shares of common stock. Still, there’s an option of an additional 10.05 million shares if the IPO underwriters sell more than 67 million shares. In the investment world, if the issuer offers more stock to investors when their demand exceeds what was planned, it is called the “Greenshoe option”.

Olaplex expects the IPO price for its shares to be between $17 and $19 each, and if all the 76 million shares are sold, the IPO could take Olaplex’s valuation to as high as $12.3 billion. However, Olaplex will not receive a single cent of this money because all the shares are being issued by the company’s existing shareholders Advent and Mousse Partners.

After the IPO, investment funds affiliated with Advent International will beneficially own about 79.6% of Olaplex, but this will slightly go down to 78.2% if an additional 10.05 million shares are issued through the greenshoe option. The move will make Olaplex a controlled company shielded from several corporate governance requirements by the SEC. Advent International owns 89.3% of Olaplex, while Mousse Partners owns 6.8% of the company’s outstanding shares.

Founded in 2014 by Dean Christal, Olaplex is a scientifically-driven beauty company that focuses on manufacturing luxury haircare products like shampoos, conditioners, and bond multipliers for home use and the professional haircare industry. With over 100 patents for its products, Olaplex’s products are based on scientifically supported designs to treat damaged hair.

Christal’s upbringing and the environment he grew up in majorly inspired him to start up this company after amassing a wealth of experience in the beauty industry. This is because his mother was a licensed hairdresser working in her home-based salon, while his father owned 26 beauty distribution stores.

Christal started Olaplex with a line of only three beauty products sold exclusively to haircare professionals. Olaplex’s bond multiplying technology was a game-changer in the beauty industry, and it quickly became the go-to option for hairdressers seeking to maintain, protect, treat, and repair their clients’ damaged hair.

Olaplex has expanded its product range from three to 11 different hair care products distributed through direct-to-consumer, professional, and special retail channels. The company’s product portfolio creates a barrier for would-be competitors in the haircare business, thanks to over 100 patents.

In January 2020, Christal stepped down from the Chief Executive Officer (CEO) role at Olaplex, handing over the position to the current CEO Jul Wong, who came to the position with a wealth of experience in the beauty industry. Wong is also serving as the company’s President and Director. Other top execs at Olaplex are Tiffany Walden (Chief Operating Officer, Legal Officer, Secretary) and Eric Tiziani (Chief Financial Officer).

Olaplex financials

We got to know about Olaplex’s financials on Tuesday this week when the company filed the second amendment to its S-1 registration form to the SEC, which revealed that the company registered tremendous growth in its net income, closing the quarter that ended on June 30, 2021, with $49.4 million, which is nearly 25 times higher than what the company posted in the same quarter 12 months ago. Net sales also soared 175.3% year over year to $152.1 million in the same quarter. The company had a tough year in 2020 as its net income dropped as low as 35.5% thanks to the coronavirus pandemic and large interest expenses.

COVID-19 affected Olaplex as salons worldwide were directed to close for an extended period of time during the lockdown. When the lockdown was lifted, most salons were allowed to accommodate only a few customers at a time. This disrupted its retail stores, hair salons, manufacturing, and distribution of its haircare products. The 2021 growth is attributed to a broader reopening of most countries across the world.

As of June 30, 2021, Olaplex’s total book value stands at $627.4 million, while its total cash and cash equivalents stand at $76.4 million. Book value is the difference between a company’s assets and liabilities. As of June 2021, Advent International, the majority shareholder of Olaplex, values the haircare company at least $1.5 billion, but the planned IPO will tremendously raise this value to $12.3 billion if all the 67 million shares are sold at $19 each as planned in the company’s filing to the SEC.

SEC filing also shows that Advent International will issue 62.5 million shares while Mousse Partners will issue 4.5 million. After the IPO, approximately 648.1 million shares will be outstanding.

Olaplex’s major competitors

Although Olaplex’s 100 patents protect it from some new competition in the haircare and related business, the company is facing competition from L’Oreal S.A. (ticker: OR.PA) from France, Unilever PLC (ticker: ULVR) from the UK, Henkel AG & Co. KGaA (ticker: HEN3) from Germany, and its Asian market is also covered by Kao Corporation (ticker: KAO) from Japan. In 2020, the global haircare market was worth $92.5 billion, and it is expected to be $105.1 billion in 2025, according to

What you need to know about the Olaplex IPO expected this week

A host of companies have decided to go public this year in a move intended to raise capital through floating their shares on the stock exchange. Companies like cryptocurrency exchange Coinbase Global Inc. (ticker: COIN), Chinese ride-hailing company Didi Global Inc. (ticker: DIDI), and stock brokerage firm Robinhood (ticker: HOOD), among others, all had their Initial Public Offering (IPO) debuts this year, and in a few days from now, we will add Olaplex Holdings Inc. on that list.

On August 27, 2021, Olaplex filed documents to the Securities and Exchange Commission (SEC) about a planned IPO for its shares of common stock. Olaplex’s two institutional shareholders hold all these shares; Advent International Corporation and Mousse Partners Ltd.

Olaplex has since submitted two amendments to the original S-1 registration form to the SEC, with the second submitted on Tuesday, September 28, 2021. None of the documents indicates when the company will debut on the stock exchange, but this is expected to happen sometime this week, with the company’s shares listed on the Nasdaq Global Select Market tier of the tech-heavy Nasdaq Stock Market. Olaplex will trade under the ticker symbol OLPX.

According to SEC documents, Olaplex’s two shareholders Advent International Corp and Mousse Partners Ltd, will offer 67 million shares of common stock. Still, there’s an option of an additional 10.05 million shares if the IPO underwriters sell more than 67 million shares. In the investment world, if the issuer offers more stock to investors when their demand exceeds what was planned, it is called the “Greenshoe option”.

Olaplex expects the IPO price for its shares to be between $17 and $19 each, and if all the 76 million shares are sold, the IPO could take Olaplex’s valuation to as high as $12.3 billion. However, Olaplex will not receive a single cent of this money because all the shares are being issued by the company’s existing shareholders Advent and Mousse Partners.

After the IPO, investment funds affiliated with Advent International will beneficially own about 79.6% of Olaplex, but this will slightly go down to 78.2% if an additional 10.05 million shares are issued through the greenshoe option. The move will make Olaplex a controlled company shielded from several corporate governance requirements by the SEC. Advent International owns 89.3% of Olaplex, while Mousse Partners owns 6.8% of the company’s outstanding shares.

Founded in 2014 by Dean Christal, Olaplex is a scientifically-driven beauty company that focuses on manufacturing luxury haircare products like shampoos, conditioners, and bond multipliers for home use and the professional haircare industry. With over 100 patents for its products, Olaplex’s products are based on scientifically supported designs to treat damaged hair.

Christal’s upbringing and the environment he grew up in majorly inspired him to start up this company after amassing a wealth of experience in the beauty industry. This is because his mother was a licensed hairdresser working in her home-based salon, while his father owned 26 beauty distribution stores.

Christal started Olaplex with a line of only three beauty products sold exclusively to haircare professionals. Olaplex’s bond multiplying technology was a game-changer in the beauty industry, and it quickly became the go-to option for hairdressers seeking to maintain, protect, treat, and repair their clients’ damaged hair.

Olaplex has expanded its product range from three to 11 different hair care products distributed through direct-to-consumer, professional, and special retail channels. The company’s product portfolio creates a barrier for would-be competitors in the haircare business, thanks to over 100 patents.

In January 2020, Christal stepped down from the Chief Executive Officer (CEO) role at Olaplex, handing over the position to the current CEO Jul Wong, who came to the position with a wealth of experience in the beauty industry. Wong is also serving as the company’s President and Director. Other top execs at Olaplex are Tiffany Walden (Chief Operating Officer, Legal Officer, Secretary) and Eric Tiziani (Chief Financial Officer).

Olaplex financials

We got to know about Olaplex’s financials on Tuesday this week when the company filed the second amendment to its S-1 registration form to the SEC, which revealed that the company registered tremendous growth in its net income, closing the quarter that ended on June 30, 2021, with $49.4 million, which is nearly 25 times higher than what the company posted in the same quarter 12 months ago. Net sales also soared 175.3% year over year to $152.1 million in the same quarter. The company had a tough year in 2020 as its net income dropped as low as 35.5% thanks to the coronavirus pandemic and large interest expenses.

COVID-19 affected Olaplex as salons worldwide were directed to close for an extended period of time during the lockdown. When the lockdown was lifted, most salons were allowed to accommodate only a few customers at a time. This disrupted its retail stores, hair salons, manufacturing, and distribution of its haircare products. The 2021 growth is attributed to a broader reopening of most countries across the world.

As of June 30, 2021, Olaplex’s total book value stands at $627.4 million, while its total cash and cash equivalents stand at $76.4 million. Book value is the difference between a company’s assets and liabilities. As of June 2021, Advent International, the majority shareholder of Olaplex, values the haircare company at least $1.5 billion, but the planned IPO will tremendously raise this value to $12.3 billion if all the 67 million shares are sold at $19 each as planned in the company’s filing to the SEC.

SEC filing also shows that Advent International will issue 62.5 million shares while Mousse Partners will issue 4.5 million. After the IPO, approximately 648.1 million shares will be outstanding.

Olaplex major competitors

Although Olaplex’s 100 patents protect it from some new competition in the haircare and related business, the company is facing competition from L’Oreal S.A. (ticker: OR.PA) from France, Unilever PLC (ticker: ULVR) from the UK, Henkel AG & Co. KGaA (ticker: HEN3) from Germany, and its Asian market is also covered by Kao Corporation (ticker: KAO) from Japan. In 2020, the global haircare market was worth $92.5 billion, and it is expected to be $105.1 billion in 2025, according to Investopedia.

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