Fiat Chrysler files for Ferrari IPO
Fiat Chrysler Automobiles NV on Thursday filed for its initial public offering of exotic car manufacturer Ferrari.
The proposed IPO of 10 percent of Ferrari on the New York Stock Exchange will not take place until at least Oct. 13 — a year after Fiat Chrysler launched its IPO on the NYSE — due to regulatory procedures. Fiat Chrysler expects separation to be completed in early 2016, according to its registration statement with the U.S. Securities and Exchange Commission.
The number of common shares to be offered and the price range for the proposed offering have not been determined, although the proposed offering is not expected to exceed 10 percent of the outstanding common shares.
After the spinoff, the company will be named Ferrari N.V. Exor SpA, an Italian-based investment company controlled by the Agnelli family (Fiat Chrysler’s largest shareholder), will own approximately 24 percent of Ferrari. Exor chairman John Elkann, who also serves as Fiat Chrysler chairman, is the great-great-grandson of Fiat founder Giovanni Agnelli.
UBS Investment Bank, Bank of America Merrill Lynch and Banco Santander are acting as joint bookrunners for the offering and UBS Investment Bank is acting as global coordinator.
The IPO and spinoff of Ferrari was announced in October by Fiat Chrysler CEO Sergio Marchionne as a way to raise money for an ambitious five-year growth plan for Fiat Chrysler.
Fiat Chrysler will distribute its remaining 80 percent stake in Ferrari to its own shareholders. Piero Ferrari, the son of Ferrari founder Enzo Ferrari, owns the other 10 percent.
Ferrari is among one of the most exclusive and recognizable brands in the world. It is focused on exclusivity (producing about 7,000 vehicles a year) and has an extremely loyal following of owners.
“We pursue a low-volume production strategy in order to maintain a reputation of exclusivity and scarcity among purchasers of our cars and deliberately monitor and maintain our production volumes and delivery wait-times to promote this reputation,” the SEC filing reads.
In 2014, approximately 60 percent of its 7,255 new cars shipped were sold to Ferrari owners and 34 percent were sold to those who own more than one Ferrari.
Ferrari generated nearly 2.8 billion euros (more than $3 billion) last year in revenue, and had a net profit of 265 million euros (about $300 million). Before interest and taxes (EBIT), Ferrari made 389 million euros (more than $420 million).
“We will continue focusing our efforts on protecting and enhancing the value of our brand to preserve our strong financial profile and participate in the premium luxury market growth,” according to the filing. “We intend to selectively pursue controlled and profitable growth in existing and emerging markets while expanding the Ferrari brand to carefully selected lifestyle categories.”
Marchionne has said Ferrari can expand the brand into sportswear, watches, accessories, consumer electronics and theme parks.
The company already operates a theme park called Ferrari World Abu Dhabi in the United Arab Emirates. The indoor park’s roller-coaster cars are Ferrari replicas.
Ferrari designs, engineers and produces its cars in Maranello, Italy, and sells them in over 60 markets worldwide through a network of 182 authorized dealers. It currently sells eight models, including six sports cars (458 Italia, 488 GTB, 458 Spider, F12berlinetta and our special series 458 Speciale and 458 Speciale A) and two GT cars (California T and FF).
It also offers a number of uber-exclusive limited-edition models. LaFerrari, its latest limited-edition supercar, has a sales price of more than $1 million. It planned to produce 499 of the supercars.