Superyacht maker Ferretti embarks on $1.2 billion float

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Its yachts have been favored by some of the world’s rich and famous, from Brigitte Bardot and Sophia Loren in the 1960s and 1970s to George Clooney and Jude Law today.

Now, investors can own a small share of the lifestyle when luxury yacht maker Ferretti floats on the Milan stock exchange later this month.

Ferretti, which operates under eight brands including Riva, Pershing, Itama and Mochi Craft, is looking to list around 30% of its capital at between 2.50 ($2.30) and 3.70 ($4.03) euros a share, valuing the company at between €727 million and €1.08 billion, or up to $1.2 billion.

Proceeds from the initial public offering are to be used to expand the group’s model range. Made-to-measure pleasure craft can be more than 100 feet, or 30 meters, in length and sell for an average price of more than €1.5 million.

The equity flotation comes as demand for luxury yachts has experienced rapid growth, fueled by the global rise of millionaires. There were 22.8 million people worldwide with fortunes of more than $1 million last year, an increase of 1.1% from 2017, according to a report by the research company Wealth-X. A further 2,124 people joined the ranks of the superrich, taking the total number of individuals with personal fortunes of more than $30 million to 265,490.

Ferretti is majority owned by Weichai, part of the Chinese state-owned Shandong Heavy Industry Group. Weichai is planning to reduce its 86% stake, but will retain a controlling stake. Piero Ferrari, the son of Enzo Ferrari, owns a 13% stake in Ferretti.

This is the second time Ferretti has tried to come to the public market. The yacht maker’s then-owner, the private-equity group Candover, abandoned plans for an IPO of the company 10 years ago, after the financial crisis hit demand from its upscale customer base following the collapse of Lehman Brothers. Ferretti defaulted on its debt and was taken over by lenders and managers.

Ferretti operates six shipyards in Italy and sells its yachts to customers in more than 70 countries. The group’s order backlog rose 19% in the first half of 2019 to €653 million.

It reported revenue of €332 million in the first half of 2019, an 11% increase from the same period a year earlier.