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24 July 2015
Just when we thought the IPO train had been parked away in a dark siding, following mixed success by those who came to market over the past 2 years, we get news that Ferrari has finally announced its ‘intention to float’ with an IPO in New York in late 2015/early 2016, aiming to raise $100m and spin out the ‘prancing horse’ from the Italian-American Fiat Chrysler Automobiles Group (FCA) which has been 90% owner since 1988. It represents a cornerstone of FCA’s plan to reduce net debt and generate funding for an ambitious investment target, and any M&A will be much easier without Ferrari involved.#
After a protracted 9 months due to tax reasons, the announcement has generated much public excitement at the prospect of finally being able to own a share (10% free float) of the aspirational brand with most unfortunately unlikely to ever own one of its flash supercars (disclosure: this includes the author). With 80% of shares destined for existing FCA shareholders this implies just 10% for Piero Ferrari, son of founder Enzo, but the listing is structured to guarantee the founding families (Fiat + Ferrari) >50% of voting rights, allowing the company to be spun out while still keeping a tight hold of the reins.
The filing contains no details about valuation or share price, with it still being very early days. These numbers also chop and change in the run up to the big day. However, there is talk of at least €10bn market cap which would imply more than half the current $20bn value of FCA today. The balance sheet shows €5bn of assets and we note revenues and profits growing since 2012. A good base to work from. Does Ferrari warrant a premium valuation like a luxury brand? Like the cars themselves (limited 7000 production per annum), will scarcity drive the new shares off the starting line? We’re very much looking forward to this one and encourage you to stay abreast of the latest developments by signing up to our research service. Arrivederci!
Mike van Dulken, Head of Research
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