Viking Cruise Line Seeks $11 Billion IPO Valuation, Targets Affluent Older Travelers

Viking cruise line is seeking an initial public offering (IPO) valuation of up to $11 billion as it targets affluent older travelers. The California-based company plans to offer 44 million shares, with 11 million ordinary shares offered by Viking and 33 million shares offered by selling shareholders. The IPO price is expected to be between $21 and $25 per share, potentially making it the second-biggest IPO of 2024. Viking will trade on the New York Stock Exchange under the symbol VIK.

Founded in 1997 by chairman and CEO Torstein Hagen, Viking operates a fleet of 92 vessels that travel to all seven continents, with 24 new ships on order to expand its capacity. The company saw revenue increase 48% to $4.7 billion in 2023. However, while profitable in 2022, Viking posted $1.86 billion in losses last year and has $5.4 billion in total debt as of December 31, 2022.

Viking's strategy focuses on targeting older, wealthier customers with all-inclusive luxury packages. Its ships have no casinos and do not allow children under 18. This approach has allowed Viking to generate higher EBITDA per passenger than competitors like Carnival and Royal Caribbean, though its overall profitability lags behind. Some analysts see risks in Viking's target demographic, which may be more vulnerable to shocks like the COVID-19 pandemic.

Why this matters: Viking's IPO comes as the cruise industry recovers from the pandemic downturn and the IPO market sees a resurgence. The company's premium valuation and rapid growth plans will test investor appetite for a business focused on a specific older demographic.

The IPO is being led by BofA Securities and JPMorgan. Several other companies are also expected to list shares this week, including Microsoft-backed cloud security provider Rubrik and U.K. financial services platform Marex Group. While Viking is less indebted than rivals Carnival and Royal Caribbean, its generous valuation target is seen as attainable only in calm market conditions given the risks of its focused customer strategy.

Key Takeaways

• Viking cruise line seeks $11B IPO, targeting affluent older travelers.
• Viking operates 92 vessels, with 24 new ships on order to expand capacity.
• Viking posted $1.86B in losses in 2022 and has $5.4B in total debt.
• Viking's premium valuation and growth plans will test investor appetite.
• Viking's focused customer strategy poses risks, but its valuation is seen as attainable.