Allbirds has agreed to sell all of its assets and intellectual property to American Exchange Group for $39 million, a figure that reflects a steep decline from its earlier valuation following its public market debut.
The transaction, which requires shareholder approval, is expected to close in the second quarter, with proceeds distributed to stockholders in the third quarter.
Valuation Decline And Market Reaction
The $39 million sale price represents roughly one-tenth of the $348 million Allbirds raised during its 2021 initial public offering and a small fraction of the more than $4 billion valuation it reached on its first day of trading.
Despite the reduced valuation, the deal price exceeds the company’s recent market capitalization. Shares had closed at $2.98 on Monday, giving Allbirds a market cap of approximately $24.5 million. Following the announcement, the stock rose 36% in after-hours trading.
Growth Strategy And Business Challenges
Founded 11 years ago, Allbirds became widely associated with technology industry workers, particularly in Silicon Valley, where its wool sneakers gained popularity.
After going public, the company pursued expansion into physical retail locations and broadened its product lineup to include apparel such as leggings and jackets, as well as performance running shoes. These efforts did not align with its core customer base, contributing to mounting losses.
Co-founder Tim Brown later acknowledged that the company’s rapid expansion had affected its original identity.
Buyer Profile And Portfolio
American Exchange Group, an 18-year-old privately held brand management firm, owns and manages several consumer brands, including Aerosoles and Jonathan Adler.
The acquisition would transfer Allbirds’ assets and intellectual property to the firm, marking a shift in ownership as the company seeks to address its financial position.
Featured image credits: Wikimedia Commons
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