Zug (CH) — Partners Group, which specializes in private equity and other private market investments, has acquired what it says is a “significant minority stake” in Swiss watchmaker Breitling from British investment firm CVC Capital Partners, which has controlled the watchmaking group for just over four years and has performed very well under the leadership of Georges Kern, who was previously head of IWC. The transaction was on behalf of clients, according to a Partners Group statement. The amount of the investment was not disclosed.
As the NZZ writes, it should be around 25%. The parties are silent about the price, “but 700 million Fr. it should be, if not a little more,” notes the NZZ.
New two financial investors
According to Partners Group, the goal is to work with CVC and Breitling’s management to drive the watchmaker’s development into a “leading neo-luxury watch brand.” The co-founder of Partners Group, Alfred Gantner, becomes a member of the Board of Directors of the Grenchen-based watchmaking group.
Initial public offering in a few years
Daniel Pindur, CVC representative on Breitling’s board of directors, said, “With Partners Group coming on board for the next four to five years, we’re also bringing new expertise on board.” The plan, he said, is to take Breitling public on the Swiss stock exchange in a few years. Well-known consumer brands or even luxury brands have not been the core business of the Zug-based asset manager until now. But Alfred Gantner admits that he himself has been a big fan ever since his wife gave him a Breitling as a fiftieth birthday present three years ago.
“We also started to look at the brand and the watch industry with Partners Group at that time, and for the last two years we have been talking with CVC and Georges Kern about a possible engagement,” he tells NZZ. “We like how Breitling sets itself apart from the traditional, exclusive watch brands. The focus on casual luxury and involvement in trend sports such as surfing, triathlon and biking is in keeping with the spirit of the times.”
They would also have liked to buy the whole company, but CVC wanted to remain involved for good reasons and also retain control. “That’s not a problem for us because we’ve known CVC for over twenty years and have made several joint investments,” Gantner said. Partners Group could well imagine remaining involved for several years beyond a potential IPO.
Breitling CEO Georges Kern says: “The beauty of private equity is that you can act extremely quickly.” He is on the phone with Daniel Pindur from CVC almost every other day, and important decisions are made immediately.
There are no publicly available figures on Breitling’s business performance. According to estimates, the new team around Georges Kern has been able to increase sales, which had been around CHF 400 million at the time of the takeover, to around CHF 700 million in the past four years, according to the NZZ. and even with higher margins thanks to growing direct sales. Profit at Ebitda level is expected to be around CHF 175 million, according to a source quoted by Reuters.