Cover50, the Italian trouser specialist that manages the high-end PT01, PT05 and PT01 Woman pants lines, kicked off its financial road show on Wednesday in Milan. The company is pursuing an initial public offering on the Alternative Market of Capital segment of the Milan Stock Exchange.
About one million shares plus a 15 percent overallotment option, equal to a free float of 27 percent of the company’s share capital, will be put on the market. The total shares will be directed at Italian and foreign institutional investors (excluding those from the United States, Australia, Canada and Japan).
The operation is valued at about 20 million euros, or $21.5 million at current exchange rates, of which 40 percent, roughly equal to 8 million euros, or $8.6 million, will go to the company. The Fassino family, which controls 100 percent of Cover50, will retain a 70 percent majority stake in the firm.
The road show will end on Friday, when the share price will be determined, and trading is expected to begin in mid-May. BIM — Banca Intermobiliare di Investimenti e Gestioni SpA — is global coordinator and sole book runner.
“This operation represents a strategic step for the growth of our company,” said Cover50 chief executive officer Edoardo Fassino, who also added that the IPO will allow the company to make relevant investments to expand the business internationally, especially in the U.S. where the company’s collections are already sold in 32 stores, including Saks Fifth Avenue and Barneys New York. “The goal is to get in between 150 and 200 multibrand stores,” Fassino said. He also highlighted that Cover50 will boost its staff and invest in communication, especially to improve the women’s division, which launched in 2012 and accounts for a mere 10 percent of the company’s business, while PT05, the five-pocket pants range established in 2010, accounts for 20 percent.
Launched in 2005 in response to an onslaught of cheap products from emerging markets, PT01, the men’s high-end label, focuses on “formal, creative pants,” according to Cover50 general manager Mario Stefano Maran. The line accounts for 70 percent of Cover50’s total sales.
The company closed 2014 with revenues of 24 million euros, or $29.28 at average exchange, with an earnings before interest, taxes, depreciation and amortization margin of 29 percent.
Cover50, which sells in 40 countries, makes 60 percent of its sales outside Italy, notably in Japan, which represents 18 percent of turnover.