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Abu Dhabi, UAETuesday 18 December 2018

Aston Martin targets $6.8bn valuation in potential IPO

The British sports car manufacturer has held preliminary talks with advisers about a valuation

British car maker Aston Martin is in talks with advisers for a potential share float and is targeting $6.8 billion valuation in potential share offering. Arnd Wiegmann / Reuters
British car maker Aston Martin is in talks with advisers for a potential share float and is targeting $6.8 billion valuation in potential share offering. Arnd Wiegmann / Reuters

Aston Martin is targeting a valuation of as much as £5 billion (US$6.8bn) in a potential initial public offering of the British sports car maker, according to people familiar with the matter.

The manufacturer has held preliminary talks with advisers about a valuation including debt that would put it on par with Ferrari, said the people, who asked not to be named. Investors’ interest in an IPO this year could be bolstered by the planned expansion into the lucrative sport-utility vehicle segment starting in 2019, they said.

An Aston Martin share sale in London later this year would cement the iconic brand’s comeback and mark a significant test of investor appetite for English companies ahead of the UK’s March 2019 break with the European Union. The company, famous for its connection to movie spy James Bond, surpassed 5,000 deliveries last year for the first time since 2008, and expects to exceed its 2017 guidance of at least £180 million in adjusted Ebitda on more than £840m of revenue.

The valuation is a preliminary estimate and no decision has been taken on the possible listing as advisers are also considering other options for the car maker, the people said.

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“As a matter of policy, Aston Martin does not comment about speculation concerning future ownership or capital restructuring,” said Simon Sproule, a spokesman for Gaydon, a British car maker. The company is controlled by Investindustrial, which declined to comment, and Kuwaiti Investment Dar.

Aston Martin will start building the DBX SUV at its new factory in Wales by 2019. The company said in November its new $150,000 Vantage model had sold out almost all of its production capacity for 2018.

Ferrari has a current stock-market value of about $21.4bn, and an enterprise value of about 18.5 times its expected 2018 earnings before interest, taxes, depreciation and amortization, based on data compiled by Bloomberg. The Italian car maker posted over 30 per cent adjusted Ebitda margin in the third quarter, a rare feat that puts the company in the league of Apple or luxury goods makers LVMH and Gucci.