LEGO’s IPO: Should it Attract Day Trippers or Investors?

Image credit: Financial Times News

The iconic Lego brand is taking tentative steps towards an initial public offering (IPO). The Danish toy maker, owned by the fourth generation of the founding family, is managing the handover in a way that puts family interests first. Things have been going well, with sales and profits up 60% since 2019. And the company has been further diversifying, taking over theme parks, launching Legoland Discovery Centers, and emulating Disney by creating characters and stories to monetize multiple channels.

Kjeld Kirk Kristiansen, family patriarch and Chairman of Lego, is artfully maintaining the magic formula of the Lego brand while steering the company into the future. Kirk Kristiansen recently transferred just over a third of the votes in the family holding company Kirkbi to a non-profit foundation, K2. The foundation has made clear that it will not block any listing officially supported by the family.

Should Lego ever become publicly traded, investors could expect to pay a substantial premium for the stock. As it stands now, Merlin, which owns the Legoland theme parks, is worth an estimated $8.5bn. If a lower multiple is applied to the toy business, it could be worth nearer $33bn alone. Clearly, Lego has outgrown the humble toy bricks and created something much bigger.

For now, however, the attraction is more welcoming to day-trippers than investors. And why not? Lego has always been much more than a toy since its founding in 1932, sparking creativity and innovation in generations of children. Its success is built on inspiring the imaginations of children, and no amount of money can achieve that.