Racing to the Future
The closely held company’s growth has made it an attractive target for investors—but it looks like they will have to wait a while.
Conversations with Apple Inc. last year didn’t go anywhere, and McLaren Automotive Chief Executive Officer Mike Flewitt told the Sunday Times that the “better route” is probably an initial public offering in three to five years.
While McLaren may still be little-known among American consumers, it has a long history in racing, dating back to the legendary New Zealand driver and engineer Bruce McLaren, whose life and untimely death is the subject of a documentary film being released this month. McLaren cars won three Indianapolis 500 races in the ’70s. Then, under longtime team boss Ron Dennis, who joined the team in September 1980, McLaren won 17 Formula 1 World Championships and the Le Mans 24 Hours race.
“When we started to do this business adventure, McLaren was unknown,” recalled the dealer, Frigerio, who also has a Lamborghini outlet in Newport Beach. “Me, as an Italian, I watch Formula 1—my grandmother knows what McLaren was. Here on the West Coast, it’s a bit different.”
McLaren is also intimately involved in the Formula E electric-car racing series, having supplied motors and other electronic components for competitors through its McLaren Applied Technologies unit, which has also done work ranging from electronic sensors and manufacturing consulting to obesity research.
Tightening the Screws
In June, the racing team, the consulting unit, and the carmaking businesses were all combined into one entity, the McLaren Group, and Dennis, 70, sold his stakes in the businesses. He had already been displaced last year as chief executive officer of the technology group, which was the umbrella for the racing business and basically everything but auto manufacturing and distribution.
Unifying all the businesses under the McLaren Group should improve coordination among the various enterprises, the company said. It also simplifies the structure should an IPO eventually be pursued.
Ownership control remains with its long-term majority shareholders, the Bahrain Mumtalakat Holding Co., which is a sovereign wealth fund, and TAG Group SA, the holding company with aviation interests that previously owned the Swiss watchmaker TAG Heuer. Mohammed bin Essa Al Khalifa—adviser to the crown prince of Bahrain—serves as executive chairman and TAG CEO Mansour Ojjeh is executive committee principal. Other leaders remain in previous positions, the company said, including Flewitt as CEO of the automaking business.