Aston Martin’s long and bumpy road to an IPO

Aston Martin’s long and bumpy road to an IPO

British luxury carmaker Aston Martin, made iconic by the James Bond film franchise, is planning to bring the 105-year-old institution to the public markets for the first time.

London, United Kingdom, 21st March 2015: an Aston Martin car with 007 number plate on display in Covent Garden piazza

As Britain says goodbye to the EU in March, another aging institution, Aston Martin, is looking to get back on track through the public markets.

Aston Martin, the British National Treasure and luxury carmaker favored by James Bond, is floating plans to sell 25 percent of its shares as part of an Initial Public Offering before next March. The listing, which values the company at an estimated $6 billion, brings the 105-year-old institution to the public markets for the first time.

“Today’s announcement represents a key milestone in the history of the company, which is reporting strong financial results and increased global demand for its award-winning sports cars,”  said Andy Palmer, Aston Martin Lagonda’s president and CEO, in a statement alongside the regulatory filing. “As we continue to execute our Second Century Plan, combining a product offensive and expanding manufacturing footprint, we have the resources and balance sheet strength to continue delivering on our growth strategy.”

The Second Century Plan, announced in 2015, refers to the carmaker’s ambitious plan which includes launching seven vehicles in seven years with an expansion from sports cars into SUVs. Aston Martin is also hoping to double production to 14,000 vehicles a year. Last year, they sold 5,098 – the highest number in nine years – to its key markets in the U.S., the U.K. and China.

In the regulatory filing, the carmaker said adjusted pretax earnings for the first half of the year rose 14 percent from the previous year to £106 million (around $137 million) and sales grew eight percent to £445 million (around $575 million).

But the carmaker is still shy of its production peak of 7,300 cars in 2007, and with seven brushes with bankruptcy since launching in 1913, the road to Aston Martin’s IPO is filled with potholes. Here’s a brief overview of the brand’s history and the investors who’ve driven it through the years.

Birth of a British icon

Founded in 1913 as Bamford and Martin Ltd. by Robert Bamford and Lionel Martin, the carmaker started work on the first Aston Martin after Martin’s successful run at the Aston Hill Climb in Buckinghamshire, England. The outbreak of World War I stunted production for their first design, delaying the company until 1920 when it released its first Aston Martin. Bamford left that year, the carmaker already relying on its first outside investor Count Louis Zborowski, an amateur racer and engineer. Sadly, Zborowski died in 1924 at the Italian Grand Prix while driving an Aston Martin, with the company plunging into bankruptcy shortly thereafter.

The investors come knocking

An injection of capital from Lady Dorothy Charnwood, wasn’t enough to bring the company back from the brink but after bankruptcy, fellow investors William Somerville Renwick, an engineer with a newly inherited family fortune, and Augustus Cesare Bertelli, the successful racer and noted designer, both bought-in alongside Charnwood. Bertelli took the helm as technical director, designing every model released between 1926 and 1937. During that time, the company was saved by an investment from Sidney Whitehouse in 1929, and again in 1932 with an investment from racer Lance Prideaux-Brune.

Stockholm, Sweden – June 03, 2012: A fully restored Austin Martin from 1936.

Financial stability… for a bit

Shipping magnate Sir Arthur Sutherland purchased it in 1933 for his son R. Gordon Sutherland, who helmed the company through to the 1940s. Amidst that time, it still struggled to make a profit, selling 140 cars in the peak year of 1937. Granted, the company thwarted bankruptcy. In 1947, Sutherland put the company up for sale – placing an ad in The Times. Sir David Brown, who had built a career around tractor manufacturing, paid £20,500 for the company, adding Lagonda a few months later for £52,500. He would hold the company until the 1970s, introducing the DB models including the fabled DB5, James Bond’s choice vehicle.

Vancouver, Canada – May 18, 2013: An Aston Martin DB5 is seen at the 2013 All-British Field meet at VanDusen Botanical Garden.

Saved again

Brown stepped aside in 1972 and the less-than inspiringly-named Company Developments took the reins helmed by William Willson, paying close to £101 million for the business which was reputed to be losing more than £1 million a year. It was short-lived, and by 1975 the carmaker needed another white knight. It came in the form of a roundtable, an international consortium of investors including Peter Sprague, an American, George Minden, from Canada, and Briton, Alan Curtis. The consortium, which had no intention of hanging onto the carmaker slowly handed it over to Victor Gauntlett’s Pace Petroleum and new investor CH Industries (CHI). Shipbroker Nicholas Papanicolaou formed Automotive Investments Incorporated (AII), buying out everyone except Gauntlett and by 1984, AII owned three-quarters of the company.

Ford gets involved

In 1991 Ford took over Aston Martin from Gauntlett, ramping up production and placing the car in its Premier Automotive Group. Sales started to swing upwards, increasing from 100 cars per year to more than 700. Things were turning around for the carmaker as it approached it’s centenary. In 1998, Aston Martin built the 2,000th DB7, and four years later, in 2002, it manufactured its 6,000th, shattering previous records. Ford continued the turnaround until an internal audit in 2007 at the height of the financial crisis, led the company to divest in Aston Martin.

Prodrive to present

Geneva, Switzerland – March 2, 2016: 2016 Aston Martin DB11 presented on the 86th Geneva Motor Show in the PalExpo

In 2007, a consortium of investors led by Prodrive and including current owners Investment Dar and Adeem Investment paid $848 million for the carmaker. Five years later, Italian private equity firm Investindustrial bought a 37.5 percent of the company, investing £150 million. A year later, in 2013, Daimler bought a five percent stake in the as of yet unprofitable carmaker.

After a silent couple of years, Aston Martin’s Second Century Plan and lofty ambitions to go public are a gamble. It’s been a long run, one marked by leadership instability, loss, and volatile financial performance. Heading to IPO before Brexit could be a flop. Or maybe it’s the beginning of a new era of profitability. Either way, something tells us Aston Martin is durable enough to survive what may come.