Chinese Owner to Seek $500 Million U.S. IPO for Lycra Unit

(Bloomberg) -- Ruyi Group has started preparing an initial public offering for The Lycra Co., months after acquiring the maker of the elastic material used in jeans and yoga pants, people familiar with the matter said.

The Chinese group is working with Goldman Sachs Group Inc. as it explores the potential deal, which could raise about $500 million, according to the people. It aims to sell shares in Lycra as soon as this year and is considering the U.S. as a listing venue, the people said, asking not to be identified because the information is private.

Ruyi completed the purchase of Lycra from Koch Industries Inc. in January, more than 15 months after the deal was announced. Bloomberg News reported that regulatory delays hampered the $2 billion cross border acquisition, which also included brands Coolmax fibers and Thermolite insulation.

Kelvin Ho, the group’s chief strategy officer, said in February that Ruyi was planning an IPO for the Lycra unit within three years. Deliberations for the planned IPO are at an early stage, and details such as fundraising size and timing could change, according to the people. Ruyi could later select an additional bank to join the deal, one of the people said.

IPO activity in the U.S. is starting to heat up. New listings led by Pinterest Inc. have raised $5.7 billion this month alone, more than double the amount a year earlier, according to data compiled by Bloomberg. The haul will rise even more with the coming share sale from ride-sharing giant Uber Technologies Inc., which is targeting to raise about $10 billion, Bloomberg News has reported.

A representative for Ruyi said the company is considering an IPO for Lycra, though it hasn’t confirmed the listing venue, fundraising size or financial adviser. A representative for Goldman Sachs declined to comment.

Ruyi, which has ambitions of becoming the LVMH of China, is pursuing the Lycra listing after a spate of overseas acquisitions of marquee fashion brands, including U.K. trench coat maker Aquascutum and France’s SMCP SA, whose labels include Sandro, Maje and Claudie Pierlot.

The company is currently focusing on integrating existing brands and easing its dealmaking pace in the short to medium term, chairman Qiu Yafu said in an interview in November.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Timothy Sifert

©2019 Bloomberg L.P.