Scooter IPO

Italian investment company Immsi and Deutsche Bank are finally preparing to float their Italian scooter portfolio company, Piaggio, which could be worth about €1.3bn (US$1.55bn) if the IPO is successful in the summer.

Piaggio has hired Caboto, the investment-banking arm of Banca Intesa, Citigroup, Deutsche Bank, Lehman Brothers and Mediobanca for the IPO, which was filed with the regulators last week.

Piaggio was forecast by analysts to have net sales of €1.45bn last year, up from a reported €1.08bn in 2004, and estimated 2006 turnover of €1.61bn. Earnings before interest, tax, depreciation and amortisation was an estimated €185m in 2005 and were forecast to be €205m this year.

Analysts said Piaggio’s equity would be valued in line with its peers, such as Honda and Ducati, at about €1.3bn. At this level, Deutsche European Partners IV fund, which invested the money in the Morgan Grenfell buyout in 1999 and is now being advised by spin-off unit MidOcean, would broadly receive their investment back having been forced to accept a debt-for-equity swap in 2003, which had been a first for the country.

Morgan Grenfell bought 80% of the previously family-run scooter company in 1999 for US$750m, with management and Texas Pacific Group having 10% each. But over the next few years sales fell sharply – to 360,000 units in 2002 from 480,000 in 2000, despite the company buying Spain’s Derbi and Moto Guzzi.

In September 2003, therefore, the private equity firms reduced their stake to 31.25%, with Telecom Italia head Roberto Colaninno, through his listed Immsi investment vehicle, taking another 31.25%. Both groups invested €100m as part of the deal, which saw Piaggio’s consortium of 38 banks, led by Intesa, inject €120m in return for 37.5% and writing off an estimated €250m of the company’s €600m in debt.

A year later, and the equity mix was further altered as Piaggio bought local rival Aprilia.

James Mawson