Spanish fashion and fragrance company Puig, owner of popular brands such as Paco Rabanne and Charlotte Tilbury, is prepping for a major initial public offering (IPO) targeting €2.5bn ($2.71bn), the Financial Times (FT) has reported.

The family-owned company plans to list on the Madrid Stock Exchange and potentially others in Spain.

Bankers estimate Puig's value to be between €8bn and €10bn.

The IPO will involve two parts: a €1.25bn primary offering of new shares, followed by a larger secondary offering from existing shareholders, bringing the total raised above €2.5bn.

The move positions Puig to capitalise on Europe's strong IPO market rebound in 2024. Rising stock prices and potential interest rate cuts are encouraging companies to go public.

Despite potential economic headwinds, the FT said that Puig believes its focus on premium beauty products such as fragrances and makeup positions it well. These categories tend to be less susceptible to consumer spending slowdowns compared to luxury goods such as watches and handbags.

The Puig family intends to retain majority control through special voting shares, while outside investors will have standard shares with less voting power.

This IPO signifies a strategic shift for the company, as it aims to balance family ownership with increased market accountability.

Puig reported strong financials in 2023, with record net revenues of €4.3bn ($4.66bn) and a 16% net profit increase.

According to the FT, chairman and CEO Marc Puig - the third generation of family leadership - sees the IPO as a way to ensure long-term growth. He plans to use the raised funds for potential acquisitions and consolidating ownership stakes in existing brands.

While smaller than industry giants like L'Oréal and Estée Lauder, Puig has grown rapidly through acquisitions in recent years, gaining brands such as Charlotte Tilbury and Jean Paul Gaultier.

This IPO positions Puig for continued expansion and solidifies its place as a major player in the global beauty market.