Bavaria Buy-out, But Beneteau Booming

by IBI News/Sail-World Cruising on 28 Jun 2007 German boat manufacturer Bavaria has been taken over by private equity firm Bain Capital for 1.3 billion Euros at the same time as French boat manufacturer Beneteau reports that they are heading from strength to strength with anticipated annual sales of almost one billion Euros.

IBI News reports that Bain Capital, supported by subsidiary investment funds, has signed an agreement to acquire 100 per cent of the shares of Bavaria Yachtbau, one of the largest production yacht producers in the world. Bavaria, which was founded by Winfried Hermann in 1978, builds around 3,500 yachts per year at its yard in Giebelstadt, Germany, with sales of around €271 million during the 2005/2006 fiscal year. The acquisition is expected to go through on July 31, 2007.

'In an intensive selection process, shareholders Elfriede Herrmann and Yachtagentur Josef Meltl Beteiligungs GmbH have decided in favour of the option which, from their point of view, holds the highest future potential,' says Bain Capital in a statement. 'In addition to a further strengthening of the Giebelstadt location, it is planned to expand the international dealer network and to open up new attractive markets abroad.'

IBI believes that at least 15 private equity and industry parties participated in the bidding process to acquire Bavaria and that there was intense competition for this valuable asset which has resulted in a world record investment in a major boatbuilder.

Founded in 1984, Bain Capital is a global equity firm that has invested in more than 230 companies worldwide from a range of different sectors. The company currently holds an investment in Bombardier Recreational Products (BRP), one of the world's largest producers of PWCs, sport boats and outboard motors, and boasts more than €35 billion in assets under management.

Bavaria's general manager Rudolf Müller and sales director Mike Reuer will continue to operate the company, but will be complemented by additional staff over the next few months. Upon completion of the acquisition, company founder Winfried Herrmann will withdraw from active management to become a member of the advisory board.

According to Bain Capital, Yachtagentur Josef Meltl will continue to serve as one of the leading dealers for Bavaria sailing yachts in Germany.

Meanwhile, Groupe Bénéteau has revealed that its third-quarter sales for 2006-2007 reached €373.1 million, resulting in a 28.4 per cent increase over the €290.6 million that was generated during the same time last year.

At the end of May 2007, year-to-date sales represented some €750.3 million — a 23.1 per cent rise over the €609.5 million that was achieved by the end of May 2006. This figure includes €77.8 million for IRM, a mobile home manufacturer that was consolidated in the group's accounts as of January 1, 2007.

The French group says that growth has been driven by all of its activities. For its Bénéteau, Jeanneau, CNB-Lagoon and Wauquiez boats, it noted an 8.4 per cent increase from €531.7 million to €576.1 million. On a constant exchange rate basis, this growth comes out at 9.2 per cent. The third quarter saw a further acceleration, climbing from 6.9 per cent over the first half of the year to 11.5 per cent on a constant exchange rate basis.

For its Microcar and O'Hara brands, the group noted a leap in sales of 24 per cent to €96.5 million compared to €77.8 million the previous year.

'In light of the sales recorded over the first nine months, the level of the order book for boats and the upturn seen on other activities, the group is able to confirm its annual growth forecast for around 20 per cent — €985 million, compared with €826.2 million last year,' says Bénéteau in a statement.

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