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Abu Dhabi, UAEMonday 17 December 2018

Aston Martin said to hire Lazard amid IPO speculation

Owners Investindustrial and a group of Kuwaiti investors are hoping to cash in on a recovery in sales

The Aston Martin Vanquish Zagato family: The UK sportscar maker may be about to launch an IPO. Courtesy Aston Martin
The Aston Martin Vanquish Zagato family: The UK sportscar maker may be about to launch an IPO. Courtesy Aston Martin

Aston Martin's owners have hired Lazard to prepare for a stock market listing or sale of the British sportscar maker made famous by the fictional spy James Bond, sources familiar with the matter said.

The Italian private equity fund Investindustrial and a group of Kuwaiti investors, who together own more than 90 per cent of the marque, are hoping to cash in on a recovery in sales and are in the initial stages of a strategic review.

They have hired the investment bank Lazard to work on a preliminary plan and could either opt for an initial public offering (IPO) in the third or fourth quarter of 2018 or a trade sale, two of the sources said.

A deal could value the maker of the sportscar driven by Britain's Prince William on his wedding day at between £2 billion (Dh 9.78bn) and £3bn, one of the sources said, adding a listing was the most likely option.

However, no final decision had been taken and the investors could decide to retain control, the sources added.

Investindustrial declined to comment while Aston Martin and Lazard did not return requests for comment. Adeem Investment, one of the Kuwaiti investors, was not immediately available.

If successful, a float of Aston Martin would be a milestone deal for the 104-year-old car manufacturer and would follow the IPO of the Italian sports carmaker Ferrari, which made its Wall Street debut in 2015 amid strong investor demand.

“Clearly Ferrari have IPO’d, they’ve made a great success of it,” Mark Wilson, the finance director of Aston Martin said last week. “We are very, very similar to Ferrari in how we’re constructed in our heritage and brand and history in cars, so people always naturally make that leap.”

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Investindustrial, led by the founder Andrea Bonomi, bought 37.5 per cent of Aston Martin in 2012 in what was the fund's best-known investment in Britain.

The fund, which has clinched a number of southern European investments since its launch in 1990, is Aston Martin's single biggest investor and is driving the plans, the sources said.

Beside Lazard, other investment banks have approached the private equity fund in recent weeks offering advice ahead of a possible IPO, another source said.

Yet no other mandates will be awarded this year for the Gaydon-based firm, which is in the midst of a turnaround plan that aims to restore the business to profitability following six years of losses.

Aston Martin, which recently unveiled its new Vantage model, is on course to post its first annual pre-tax profit since 2010 as strong demand for the luxury auto maker's DB11 sports car boosts its performance.

Last month the company, which has two showrooms in the UAE, reported record nine-month results on revenues up 84 per cent to £567 million for the period ending September 30 and raised its full-year outlook. Aston Martin posted a near fourfold increase in Ebitda to £121m, while it generated pre-tax profits of £22m, reversing losses of £124m in the same period last year.

It also sold out its limited-edition Vanquish Zagato model, which has been extended to include a Speedster and a Shooting Brake version.

The group aims to sell 7,000 cars a year – which would put Aston Martin on a par with Ferrari. Last year, the company sold 3,500 units, while it is set for sales of 5,000 this year.

The Aston Martin boss Andy Palmer has repeatedly said that the decision and timing of an IPO were matters for the shareholders but that it made sense for them to consider the option before the end of the company's turnaround plan, which is due to be completed in 2022.

Since Mr Palmer's appointment in 2014, the firm has pursued a recovery strategy designed to boost its model line-up, quadruple volumes and produce its first 4x4 at a new plant in Wales.

Its volumes rose by 65 per cent to 3,330 cars in the first nine months of the year, prompting the firm to raise its full-year guidance to expect core earnings of at least £180m on revenue of more than £840m.