CVC Capital Partners has reached a deal to purchase a majority stake in Breitling SA, a Swiss manufacturer of premium watches, for an undisclosed amount. The private equity firm is acquiring the target using funds from its sixth fund, CVC Fund VI.
Breitling is an independent manufacturer of high-performance watches. The target was founded in 1884 and is currently owned by the Schneider family. Theodore Schneider, the son of Ernest Schneider, took over the company from his predecessor in the 1990s. The deal with CVC comes as the company faced dwindling sales in its biggest market, Hong Kong. Headquartered in Grenchen, Switzerland, Breitling operates two manufacturing facilities. Theodore Schneider will re-invest in the company for a 20 percent stake.
“I am convinced CVC is the right partner to elevate Breitling to the next level,” states Théodore Schneider, majority owner of Breitling. “CVC’s expertise, track-record and international network will help unlock Breitling’s full potential.”
The name recognition of Breitling sits with some of the best time piece manufacturers around. Some of Hollywood's biggest celebrities have sported the luxury brand, including: John Travolta, Usher, Harrison Ford, Justin Timberlake, and David Beckham. The target's standard chronomat series watch ranges in purchase price but begins between the range of $8,000 and $12,000. On the contrary, many famous personalities and professional athletes opt for the flashier look, customizing their watches with diamonds to total the price point of nearly $40,000.
CVC is a private equity and investment firm based in London. The Breitling transaction is expected to close in June 2017. The PE firm has raised more than $65 billion in commitments since its inception in 1981 and has completed over 300 investments. The firm is currently invested in companies such as BJ’s Wholesale Club and Petco. In 2016, CVC agreed to buy bottle packaging company Anchor Glass Container Corp. for more than $1 billion; in February the firm raised a $1 billion middle-market investment fund to invest in tech companies; and then CVC-backed Avast Software made a $1.3 billion deal to acquire AVG Technologies NV (NYSE: AVG) for its security software services.
The middle-market has seen its fair share of deals involving luxury consumer brands. Related deals include: LVMH’s consolidation move to gain control of Christian Dior for nearly $13.2 billion; Bain Capital Private Equity and Bow Street LLC teaming up to buy diamond ring seller Blue Nile LLC for $500 million; Marquee Brands’ acquisition of Bruno Magli, a luxury dress shoe manufacturer for men; and luxury handbag maker Coach Inc. buying footwear company Stuart Weitzman for $574 million.