Moncler S.p.A  Market Cap (as of 30/11/13): N/A

Moncler, the Italian maker of luxury down jackets, is expected to go public on the Milan Stock exchange by mid-December, after the approval received on Tuesday by Consob, the Italian stock market regulator. It aims to raise about €800mln, with an IPO price ranging from €8.75-€10.2 per share.

Besides its goose down jackets (around 85% of total revenues), Moncler also offers a full-line of clothing, accessories and luggage (through a partnership with RIMOWA).

Moncler’s sales are generated in Asia (approx. 1/3), in Europe (excluding Italy) (32%), in Italy (24%) and in the US (10%). As part of its international expansion plan the company is eyeing the Brazilian market, an expansion which will be partly supported by funds raised through the IPO.

Moncler’s main shareholders are two private equity groups, Eurazeo through ECIP (45% stake) and Carlyle through CEP III (17.8% stake), Brand Partners 2 (5% stake) and the president Remo Ruffini, who detains a 32% stake and intends not to sell any share in the IPO.

This is going to be the second attempt for Moncler to go public. The first was in 2011 when Moncler canceled the IPO because of the unfavorable market conditions in Europe. The then biggest shareholder Carlyle decided to sell a 45% stake to Eurazeo for €418mln. It is worth mentioning that Prada, another luxury goods producer company then launched successfully its $2.47bn IPO on the Hong Kong stock exchange. However, it seems that the focus for luxury IPOs switched back to Piazza Affari. On April 2011 the cashmere-wear maker Brunello Cucinelli and one year later, the Italian shoe-maker Salvatore Ferragamo were very successful in their IPOs. Both companies have more than tripled their IPO share price and boosted their expansion plans encouraging Moncler to follow through with its IPO plans.

Raffaele Jerusalmi CEO of the Milan Bourse, has stated that there is more to expect during the next year in terms of IPOs on the Italian stock market. According to him “four or five” companies have plans to list on the Milan Stock exchange. These will add to the already well-established luxury group identified by Luxottica, Tod’s, Piquadro, Poltrona Frau, and lately Ferragamo and Cucinelli. Prada itself may be thinking of a secondary listing in Milan, as its presence in the recent meeting of 130 investors with luxury companies at the Milan exchange may signal.

This trend of luxury companies listing on the Italian stock exchange is likely to be driven by the favorable policy of Piazza Affari which wants to become the reference market for the sector, and by investors’ desire to tap into luxury retail, a sector that has quickly rebounded since the global financial crisis.

Moncler gained CONSOB’s approval on Tuesday, following the approval of its listing on the Mercato Telematico Azionario granted on November 22 by Borsa Italiana.

The selling shareholders ECIP M. S.A., CEP III Participations S.r.l. SICAR and Brands Partners 2 S.p.A, in agreement with the Joint Global Coordinators, have identified an indicative valuation range of between a non-binding minimum price of Euro 8.75 per share and a binding maximum price of Euro 10.20 per share.

Approximately 27% of the Milan-based company will be publicly traded following the IPO with a greenshoe option (to sell additional shares) which would increase the amount of shares traded to 31% of the listed company. Mr. Remo Ruffini, who bought the company in 2003, will keep his 32% stake owned through Ruffini Partecipazioni S.p.A and will become the largest shareholder after the listing. ECIP M. S.A. will sell 14% of the shares and distribute another 5.081% to its shareholders other than Eurazeo S.A. Carlyle-controlled CEP III will list half of its stake, retaining 8.7%. Finally, Brand Partners 2 S.p.A. will sell 3.74% of its 5% stake.

A multiples valuation of the IPO price, based on EV/EBITDA and P/E of peers like Ferragamo and Cucinelli over the four quarters preceding IPO, confirms the reasonableness of the €8.75-€10.2 range. Ferragamo, indeed, was listed at a price of €9 per share reflecting a EV/EBITDA of 13.7 and a P/E of 24.9. Similarly, the €7.75 IPO share price of Cucinelli reflected a EV/EBITDA of 14.3 and a P/E of 25.1. For Moncler, the minimum scenario of €8.75 per share and the resulting total market cap of €2,187.5mln will represent an EV/EBITDA of 13.7 and P/E of 23.7; while the maximum scenario of €10.2 per share and the corresponding market cap of €2,550mln will denote a EV/EBITDA of 15.8 and a P/E of 27.6 (measured on a LTM basis).

According to a multiples comparison, there is a reasonable upside potential for Moncler. Cucinelli and Ferragamo have more than tripled their IPO price (respectively +330% and +325%) as the industry is growing fast after the crisis and investors are eager to tap the luxury retail market. This situation has brought Ferragamo shares to trade at an estimated P/E (12/2013) of 33.3 and Cucinelli’s at 59.5.

Goldman Sachs, Bank of America Merrill Lynch and Mediobanca are global coordinators of the sale. JPMorgan Chase, Nomura and UBS will work as joint bookrunners. Claudio Costamagna, a former Goldman Sachs banker, and Lazard are advising Moncler.


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How to trade Moncler? | BSIC · 8 December 2013 at 16:02

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