Italy’s luxury yachts maker Ferretti Group will raise 100 million euros in a capital increase in its coming ipo at the Milan Stock Exchange which will also include the sale of a some stakes by some of its actual shareholders, the company said on Monday in a statement (see the press release here).
The deal will take place as a private placement and will be addressed to Italian and US institutional investors and qualified Italian investors, as well as to the top management of the group with a discount on the offer price.
The offer is expected to be completed by the end of October as it was already rumored some weeks ago and will se a free float between 35% and 40% (see here a previous post by BeBeez). Barclays Bank, Bnp Paribas, Mediobanca and UBS Investment Bank will act as joint global coordinators and joint bookrunners as for the offer while Bnp Paribas will also act as a sponsor for the purpose of listing.
In view of the ipo, Chinese group Weichai (Shandong Heavy Industry), the controlling shareholder with 86.2% of Ferretti, has converted the 212 million euros shareholders’ loan into capital with a choice therefore very different from the hypotheses that circulated last May. At that time Ferretti was said to be issuing a 250 million euros bond to repay the shareholders’ loan (see here a previous post by BeBeez).
Furthermore, Piero Ferrari, who in turn is an actual shareholder of Ferretti with a 13.6% stake through its F Investments, and Adtech Advanced Technologies have committed to invest a total of 40 million euros (of which 25 million euros already paid by Adtech Advanced Technologies) through a pre-ipo capital increase. Following the completion of the offer, Weichai will remain the majority shareholder with a 51% stake and Piero Ferrari will remain with around 10%.
The Ferretti Group is valued at around 750 million euros based on a multiple of 14x the ebitda 2018 (see here a previous post by BeBeez). The multiple is the one applied for the fashion & luxury sector.
Led by the ceo Alberto Galassi, Ferretti is among the world leaders in the design, production and marketing of luxury motor yachts and operates with its 8 brands (Ferretti Yachts, Custom Line, Riva, Pershing, CRN, Mochi Craft, Itama and Wally) with a portfolio of 43 models. The 2018 balance sheet data indicate a significant increase in net income to 31 million euros (+29% compared to 24 millions in 2017). Net revenues also increased to 669 millions (from 623 millions in 2017) , while the adjusted ebitda is slightly down, down to 53 millions from 59 millions the year before.
In H1 2019, the group reported revenues of 332 million euros (+ 11% from H1 2018) and an adjusted ebitda of 30 million euros (+ 26%). As of June 2019, the order portfolio rose to 653 million euros, with an increase of 19% from June 2018.
Weichai had invested in the yacht group at the beginning of 2012, as part of a complex debt restructuring process. Then the Chinese group had invested 178 million euros in equity and had at the same time bought Ferretti’s debt from the Oaktree fund, Rbs and Strategic Value Partners, and converted it to equity, reaching a 75% stake. At the same time, Rbs and SVP had converted the rest of the debt into equity, reaching 25%. Subsequently Weichai rounded up its stake and in 2016 Pietro Ferrari, Enzo’s son, bought his 13.6% stake.
In Ferretti’s golden age, in 2006, Permira had sold 52% of the yachts group to Candover (maintaining an 8% stake, while the founder Norberto Ferretti and managers had risen to 40%), based on an EV of 1.7 billion euro as revenues were 770.4 million euros at the end of fiscal year 2006 (August) with an ebitda of 118.4 millions.