Change of course for the Ferretti Group yachts.
After the interrupted attempt to land on the Milan Stock Exchange in 2019, iconic Italian yacht maker Ferretti Group, controlled by Chinese conglomerate Weichai, is studying listing on the Hong Kong Stock Exchange. Il Sole 24 Ore writes it.
Ferretti’s listing in Milan was ruined at the last minute in October 2019 because advisers and investors called for the placement to take place at a much lower level than the initially proposed fork. Alberto Galassi, then as now CEO of the Forlì holding, had specified: “The book has been closed and everything is distributed, but at low prices, because the markets are nobody’s friend, neither in Italy nor in other countries”. And he added that the landing on the stock market would resume “after we show how much we are worth and together with a new partner, who could reach up to 30% of the capital, as expected for the initial IPO project, and then dilute the stake. of the three shareholders in the event of a new listing attempt. ”
Regarding the valuation of Ferretti, we recall that at the end of September 2019 a price range of between € 2.50 and € 3.70 per share was set, equivalent to an equity value prior to the capital increase of between 627 and € 928 million, corresponding to a post-increase capitalization of between € 727 and € 1,076 million. However, the placement price had been reduced to € 2-2.50 per share, a level that Galassi considered too low at the time. In spring 2019, pre-money valuations of around 750 million euros circulated for Ferretti based on a multiple of 14 times the 2018 EBITDA, which was just under 53 million compared to 609 million euros.
Ferretti, led by Alberto Galassi, has been 86% controlled by Weichai since 2012, through Ferretti International Holding spa, with Piero Ferrari (son of Enzo, founder of the rampant horse car company) owning the 11, 1% and AdTech’s technical partner. who owns 2.79%; Finvestments owns the remaining interest in Ferretti. Weichai had invested in the yacht group in early 2012 as part of a complex debt restructuring process. At that time, the Chinese group had invested 178 million euros in shares and, at the same time, bought the debt of the Ferretti Group from the Oaktree fund, Rbs and Strategic Value Partners, which was later converted into shares, and Weichai reached 75 % of capital. At the same time, Rbs and SVP had converted the rest of the debt into equity, reaching 25%. Subsequently, Weichai rounded his stake and in 2016 Piero Ferrari bought 13.6%. All this happened after the great crisis that Ferretti went through in early 2008. In 2006, Permira sold 52% of Ferretti to Candover (maintaining an 8% stake, while founder Norberto Ferretti and the managers had risen to 40% ), based on a valuation of 1,700 million euros, compared to revenues of 770.4 million at the end of 2006 (August) and an EBITDA of 118.4 million.
The Ferretti group closed 2019 with 649.3 million euros of consolidated income (+ 6.5% compared to 2018), an adjusted EBITDA of 62.2 million (+ 16.3%), an EBITDA margin of 9.6% (from 8.8%) and a net financial debt of 80 million, well below the 265 million at the end of December 2018 (see sustainability report here), thanks to the conversion to equity of the shareholder loan of 212 million made as of August 2019. The company achieved an order intake that in the first three quarters of the year exceeded 900 million euros, of which more than 220 million euros were registered in September alone.
Last February, the news of the negotiations for the entry into Ferretti with minority participation of the venture capital Space Capital Club, a private equity investment vehicle with an endowment of 200 million euros, launched in October 2019 by Space. founded by Sergio Erede, Roberto Italia, Carlo Pagliani and Edoardo Subert, which in recent years has been the promoter of the Space Spacs series. But the operation had not materialized.
Also last February, the Ferretti Group together with its competitor Sanlorenzo had launched a joint venture to take over Perini Navi in an auction called by the Lucca bankruptcy court. Then they both fell back, considering that the base price of 62.50 million was too high. At the end of September, the second Perini Navi auction was also deserted, with a base price of 56.25 million and the third auction should be launched at the end of the year, probably at a base price below 50 thousand lones.