Ferretti Group to list around 30% of stock; the IPO values the group at up to €1.1bn

According to a report on the online Market Watch financial news service, Italy’s Ferretti Group plans to list around 30% of its stock on the Milan Stock Exchange this month.

The confirmed offer price of the shares will be determined at the end of the Offer Period which began yesterday (1 October) and is scheduled to remain open until 10 October, subject to either an extension or early closure. The first day of active trading is expected to begin on 16 October.

The selling shareholders have identified an indicative value ranging from €2.50 and €3.70 per share, which gives the group a valuation of between €727m and €1.08bn. Ferretti’s majority shareholder, the state-owned Chinese Weichai Group which currently holds around 87%, will reduce its shareholding but retain a controlling interest. Ferrari is the other main shareholder in the company.

Consolidated Group revenues for 2018 rose nearly 10% over the previous year totalling €625 million, minus approximately €16 million in commissions and related costs.

In terms of the group’s current financial performance, in the first half of 2019 its revenue increased 11% to €332m with an EBITDA of £30m, a rise of 25.7% compared with the corresponding period last year. The value of the orderbook for the first half was said to be worth €653m, which is a 19% year-on-year rise.

Ferretti indicated in its recent press conferences at Cannes and Monaco that the proceeds of the initial public offering (IPO) will be used to support the expansion of the group faster than might otherwise be possible.

CEO, Alberto Galassi, pointed out at the conferences that with the recent and current financial performance of the group plus the boost of a €250m loan-to-equity transfer by the group’s two shareholders increasing the group’s capital resources, that the IPO was not necessary, especially as the group was now debt-free.  He added, however, that the added financial resources generated by the IPO would allow Ferretti to expand at a quicker rate.

The Ferretti Group's 2018 fleet

The Ferretti Group’s 2018 fleet

With the purchase earlier this year of Wally Yachts, the Ferretti Group now comprises eight brands including CRN, Pershing, Riva, Custom Line, Ferretti Yachts, Itama and Mochi. To cope with the group’s expansion into superyachts moving from just CRN to also include Riva, Pershing and Custom Line, plus the influx of orders for its smaller yachts, the group has invested significantly in expanding its build facilities to match capacity with demand.

As part of the Wally acquisition, the group is also looking to develop a dedicated shipyard for the brand as this too is moving into the superyacht arena with new models such as the Wally 101 performance sloop and the Wallypower 165.

This is not Ferretti’s first time run as a public company.  The Group was previously listed on the stock market until 2003, when it was wholly acquired by private equity investment firm Primera for €698m. When Permira exited the business in 2007 with 2.3x return on investment, Ferretti sold luxury motoryachts across five continents with nine brands, approaching €1bn in worldwide sales.

The group subsequently changed hands a number of times, facing tougher times and heavy leverage in the wake of the global financial crisis, until purchased by Chinese industrial conglomerate Weichai Group in 2012. Under Weichai’s ownership, the Ferretti Group has paid off its debt and returned to profit in 2016.