Moncler, the Italian maker of $1,220 quilted polyester jackets, may rise on its trading debut in Milan today after investors sought about 27 times the amount of stock offered in its initial public offering.
The shares could be worth 20 percent more than the 10.20-euro IPO price “over time,” according to Allegra Perry, an analyst at Cantor Fitzgerald in London. That’s based on a “conservative” 10 percent discount to Italian shoemaker Salvatore Ferragamo SpA’s 2014 multiple of enterprise value to earnings before interest, taxes, depreciation and amortization.
“I would expect the shares to trade well following the IPO,” Perry said by phone. The potential share-price upside may be even greater than 20 percent “because people might reward it for having more international growth prospects.”
Moncler’s private-equity owners have raised about 784 million euros ($1.1 billion) after selling shares at the top of a targeted range and exercising an overallotment option, valuing the Milan-based company at 2.55 billion euros. Institutional demand was more than 31 times oversubscribed, while retail investors sought about 14 times the amount of stock offered amid renewed appetite in Europe.
Moncler follows both Ferragamo and Brunello Cucinelli SpA in offering stock to the public as Asian demand for luxury goods fuels earnings growth and draws investors. Shares in Cucinelli, the maker of $3,195 cashmere cardigans, and Ferragamo, which sells $675 patent-leather platform heels, have more than tripled since they were listed in Milan in 2012 and 2011, respectively.
Ferragamo trades at a 2014 enterprise value-to-Ebitda ratio of 15.4 times, while Cucinelli is more expensive, trading at 25.6 times, according to data compiled by Bloomberg.
Moncler is seeking to capture a larger slice of the $101 billion designer clothing market by enlarging its store network and product range, according to Chairman Remo Ruffini, who isn’t selling any of his 32 percent stake in the offering.
The company has about 100 of its own outlets and also distributes products in department stores as well as online.
The expansion is aimed at maintaining growth that’s outpacing rivals -- even Cucinelli. Sales rose 35 percent to 489 million euros in 2012, while revenue at Cucinelli increased 15 percent to 279 million euros.
Yet Moncler’s reliance on winter apparel, which makes up about three-quarters of sales, make the company a riskier investment proposition than the likes of Cucinelli, according to Rahul Sharma, managing director of Neev Capital in London.
The share offering also comes as luxury makers from Louis Vuitton to Gucci report slowing sales growth. The luxury market globally will advance at the slowest pace since 2009 this year amid slack Chinese consumption and a weaker Japanese yen, according to a Bain & Co. forecast in October.
The IPO is the biggest in Italy since Enel Green Power SpA listed in November 2010. Most of the proceeds from Moncler’s IPO will go to Eurazeo SA, a French private-equity firm, and Carlyle Group. The owners exercised an an over-allotment or “greenshoe” option to increase the offering size by 15 percent. About 31 percent of Moncler will be publicly traded after the IPO.
Moncler aborted plans to list in 2011 in favor of a sale to Eurazeo. The private-equity firm owns a 45 percent stake and is selling 14 percent in the IPO, the terms show. Carlyle Group is divesting half of its 18 percent holding.
Bank of America Corp., Goldman Sachs Group Inc., and Mediobanca SpA are managing the sale, along with banks including UBS AG, JPMorgan Chase & Co., and Nomura Holdings Inc. Lazard Ltd. and Claudio Costamagna are advising Moncler on the IPO.