After its successful launch a few days ago on the Alternative Investment Market (AIM) of the Milan Stock Exchange, Italia Independent is already targeting its quotation on the main counter of the Italian Bourse 18 months from now, provided it continues to perform well. The chances look good as the price of the shares grew to 16.15 percent from the initial offer price of €26 a share soon after their introduction, reaching a level of just under €30. It closed at 30.80 yesterday.
The initial public offering consisted of 525,000 ordinary shares initially priced at €13.6 million – 100,000 sold by current shareholders and the others issued through a capital increase – representing almost 24 percent of the group's capital. Justifying the high initial valuation, the group generated last year operating earnings before amortization (Ebitda) of €3 million on revenues of €16 million, up sharply from an Ebitda ratio of 7 percent of sales of only €6 million three years ago. In the first quarter of this year, its turnover reached €5 million, up by 176 percent, while Ebitda jumped by 325 percent to €897 million.
The shares were offered to investors on June 28, but the demand was more than three times higher than the quantity available, with 60 percent of the investors subscribing from Italy and 40 percent from other countries. By July 28, the joint global coordinators of the offering – Banca IMI and Equita SIM – will be able to exercise an over-allotment option, acquiring up to a maximum of 78,750 additional shares at the issue price, equivalent to 15 percent of the shares floated on June 28.
Lapo Elkann, a wealthy man who is heir to the Agnelli family, which controls Fiat, founded Italian Independent in Turin six years ago, with a mission to market products made in Italy, including eyewear. Elkann will retain a majority stake of around 49 percent in the company, down from his initial share of 64 percent, which would drop to 46.5 percent if the over-allotment option is exercised in full. The other main shareholders are Italia Independent's chief executive, Andrea Tessitore, with around 8.5 percent of the shares; an Italian entrepreneur, Mario Ginatta, with 8.9 percent; and three other members of the management team, Alberto Fusignani, Giovanni Accongiagioco and Pietro Peligra, each with around 3 percent.
The funds raised through the stock market introduction will be mainly used to boost cash flow, to acquire strategic minority stakes in other companies and to develop Italian Independent's retail activities, with between four and seven new concept stores planned in selected cities in Europe and the U.S.
By the end of this year, the group intends to go from 72 percent to a 100 percent ownership of Italia Independent Spa, the eyewear branch of the group's business, which generated 76 percent of the total turnover last year. The remaining 28 percent would be acquired from Brama Sportswear, the company's former licensee for Italian Independent clothing, in a transaction that would terminate the license and value the company at a discounted price of €20 million.
Italia Independent's other major business is communication, managed through a company called Independent Ideas, in which the group has a 70 percent stake. The balance of the shares is in the hands of its chief executive, Alberto Fusignani. In addition to the group's own communication activities, Independent Ideas has a number of clients in other areas, the latest being an important Italian footwear company, Fratelli Rossetti.
The group is also involved in a non-profit organization, called I Caffè Onlus, to which participants are required to contribute one euro – the price of a cup of coffee in Italian bars – for every article sold. The funds go to small humanitarian associations. In July, for example, Italia Independent is donating €1 for every sale of its products online. It has a special model of sunglasses for which it has pledged to give all revenues to I Caffè Onlus.