Ferrari NV filed papers for its long-anticipated initial public offering, setting a price range for the shares that could value the luxury auto maker at almost $10 billion.
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An IPO price range will be published in an updated filing as early as Friday, and presentations to possible buyers are slated for next week, said the people. Those companies trade at over 20X operating profit, more than 2X the average valuation of automakers.
The IPO and eventual full spinoff of Ferrari are part of Fiat Chrysler Chief Executive Officer Sergio Marchionne’s effort to raise funding to cut the parent company’s debt and help finance a 48 billion-euro ($54.5 billion) investment program that focuses on expanding the Jeep, Alfa Romeo and Maserati nameplates globally. The company also changed its proposed ticker from FRRI to RACE.
Ferrari could be valued as high as 14X expected Y 2015 EBITDA (earnings before interest, taxes, depreciation and amortization). Profit rose 8.9% in 1-H of Y 2015. Representatives for Fiat Chrysler and Ferrari declined to comment.
FCA, which owns around 90% of Ferrari, is planning to distribute the rest of its stake to its shareholders. Ferrari expects to report revenue of about €720m-€730m for the three months ended 30 September, an increase of 9-10% from a year earlier.
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In its filing with the US Securities and Exchange Commission (SEC), FCA said it is offering to sell 17.2 million common shares of Ferrari, or about 9.0 percent of its capital. The carmaker had previously set its limit at about 7,000 cars a year.
