Adore Beauty has chosen investment banks Morgan Stanley and UBS to spearhead its run at the ASX boards, and tapped Shaw and Partners as a co-lead manager.

As Street Talk revealed, Adore Beauty's board formally mandated all three firms on Wednesday, after interviewing a handful of investment banks for the role in the past few weeks.

The firms are expected to help prepare Adore Beauty for an initial public offering, while its board and majority shareholder Quadrant Private Equity consider their options.

Sources said the mooted IPO was still at a preliminary stage, and the company had yet to lock in either a timetable or valuation. Early estimates are it could seek to raise about $200 million for a $600 million-plus valuation.

Should it front listed equity markets in coming months, it is expected to be pitched as a private equity and pandemic success story with revenue pegged at more than $100 million this year.

Adore sells cosmetics and beauty products online, stocking more than 220 brands and 15,000 products, and making more than a million transactions a year.

Its online-only model has proved a winner this year, as COVID-19 lockdowns closed stores and consumers were forced to change shopping habits.

While women working from home were wearing less makeup, as part of the pitching process bankers were told sales of soap, hand sanitiser and handwash rose 300 per cent at the beginning of the pandemic and sales of personal care products rose 60 per cent.

The group, which was founded by Kate Morris and is now owned by Quadrant, is famous for including a mini packet of Tim Tams in its packages. It launched a literal beauty parade for advisers in recent weeks before selecting UBS and Morgan Stanley as its preferred joint lead managers. Gilbert + Tobin is doing the legal work.

As this column previously reported, Quadrant is expected to seek to sell part of its 60 per cent stake as part of the sharemarket listing, while Morris and her husband James Height could also reduce part of their 40 per cent stake.

Quadrant bought its 60 per cent stake in September last year via the $400 million Quadrant Growth Fund. Quadrant dealmaker Justin Ryan is Adore's chairman and is expected to retain that position as part of any ASX-listing.

Article Source: AFR, 29 July 2020