Back in September 2011 Reuters published an article titled 'McLaren Group eyes IPO in 5 years'.
McLaren, which operates the F1 racing team and sends high-end luxury sports cars that compete with Ferrari and Lamborghini, had just started selling its first model, MP4-12C, and Chief Executive Ron Dennis believed that 'in five years, which is the point of which we have the mathematics to logically have an IPO, we will look at all markets'. Well, I'm not a genius when it comes to maths, but the more realistic timescale for an IPO – every CEO is a little bit optimistic when it comes to possibilites of a float – are upon us.
The good news for potential investors is that production and sales of cars at McLaren are steadily increasing. In 2016 the company had planned to double sales from the roughly 1,500 sold in 2015 to over 3,000 in 2016 and actually delivered 3,286. This puts it well within sites of hitting its ultimate goal of selling 4,000 models annually. This figure would leave McLaren with just under half the sales of rival Ferrari, which floated in 2015 and whose value has risen by roughly 60% since going public. It is also worth noting at this point that Aston Martin also paid close attention to how Ferrari has performed on the public market and has also been rumoured to be considering a potential float.
Part of the strategy for achieving these increased sales figures includes the introduction of more practical models that come with a slightly lowered price tag. This is a similar strategy that both Ferrari and Lamborghini have implemented to incredible effect, and it appears to be working well for McLaren. And, while there are no plans at present to Launch an SUV, McLaren is actively working on new models and plans to introduce at least 15 new ones by 2022. More surprisingly, half of these are planned to be Hybrid vehicles. To deliver these models around £1bn will be invested into R&D – and with that level of investment required it is no wonder that they're accelerating towards a float.
Potential other exits have been mooted and there was once a slightly farfetched rumour that Apple had at one stage considered buying McLaren. While the tie-up looks a bit bizarre on the surface, deconstructed it makes a bit more sense. It is no secret that Apple has been working on a vehicle and McLaren is one of the world leaders in automotive technology. Apple has a track record of buying technological leaders and using their platforms as the base of their own. The last acquisition of this nature came in 2014 when Apple purchased Beats Audio for £3bn and utilised its little-known streaming service to create the base for Apple Music.
While McLaren has by no means exhausted its list of potential buyers, an IPO now seems to be the most sensible alternative. The only question that remains now is whether McLaren will put all of its business up for sale or just spin off the consumer sports car division.
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Please note IPOs are open to UK residents only.