Dueling grill makers serve their IPOs rare

Sausages and meat grill on a charcoal barbecue in a garden in Hanau near Frankfurt, Germany, June 7, 2016.
Sausages and meat grill on a charcoal barbecue in a garden in Hanau near Frankfurt, Germany, June 7, 2016. REUTERS/Kai Pfaffenbach

NEW YORK, July 27 (Reuters Breakingviews) - Weber and Traeger, makers of luxury backyard grilling equipment, are leaving something on the table for investors in their upcoming initial public offerings. The dueling BBQ brands are seeking equity valuations of $4.6 billion and $2 billion, respectively.

That gives them enterprise values of about 2 times their estimated revenue for this year, assuming their growth fades to half their recent, pandemic-seasoned rate read more . Newell Brands (NWL.O), which makes Campingaz grills, trades at 1.6 times estimated sales, but cooler-maker Yeti (YETI.N) is valued at 6 times.

True, each has its own flavor of risk. Traeger’s business is limited to one type of grill that is powered by wood pellets, which aren’t the most environmentally friendly of fuels. Weber’s IPO will leave 71% to 74% of the voting power with some pre-IPO shareholders.

Both businesses are still fast growing, though. During the height of the pandemic, from April 2020 to February 2021, sales of grills and smokers increased 39%, according to NPD. Traeger and Weber grew sales much faster in the six months to March 31. It’s rare to find companies with hot growth served lukewarm. (By Amanda Gomez)

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Editing by John Foley and Marjorie Backman

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