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NOW IN
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T H E # 1 B U S I N E S S M A G A Z I N E F O R T H E A M E R I C A N V- T W I N A N D C U S T O M M O T O R C Y C L E PA R T S I N D U S T RY
Harley to bid for Ducati?
espected London based
business news specialist
Reuters has thrown a giant
rock into our pond with a June
report that Harley-Davidson is
actively mulling a bid to buy
Italian sportsbike specialist
Ducati.
Under the headline “Harley-Davidson
enters race to buy Italian rival Ducati”
the report, by Pamela Barbaglia, for
Reuters London, said that “U.S.
motorcycle maker Harley-Davidson is
lining up a takeover bid for Italian rival
Ducati, in a deal that could be worth
up to 1.5 billion euros ($1.67 billion),
sources told Reuters” - those sources
are also reporting that Harley has
indeed decided to explore their
options, “with investment banker
Goldman Sachs hired to work on the
deal.” Tentative bids are expected
during July.
Barbaglia goes on to say that “Ducati
was on the wish list of private equity
funds KKR (themselves no strangers to
rumors connecting them with plans to
buy Harley), Bain Capital and Permira,
which are all working on the deal - said
the sources, who declined to be
identified as the process is private.”
The only response that the report
quotes is one in an e-mail from a
spokesman for VW group’s works
R
RMOT
TE
council: "Ducati is a jewel, the sale of
which is not supported by the labor
representatives on Volkswagen's
supervisory board" adding that
"Harley-Davidson is miles behind
Ducati in technology terms."
Volkswagen's powerful labor unions
control half the seats on the carmaker's
20-strong supervisory board.
VAG have retained investment
Goldman Sachs
hired for deal
that may cost 15
times Ducati’s
EBITDA
boutique Evercore, who are known to
have sent out information packages to
a number of potential suitors including
Ducati's
previous
owner
Investindustrial, who took a stake in
Ducati before the financial crisis,
subsequently taking control of the
business before selling it to Audi in
2012. The report says that
Investindustrial is now looking to
compete with heavyweight private
equity firms and large industry players
to regain control.
Barbaglia says that Volkswagen, Audi,
Harley-Davidson, KKR and Bain Capital
declined to comment and that Bajaj,
Investindustrial and Permira were not
immediately available at the time the
report was published.
Ducati last year reported revenues of
593 million euros (approximately
$677m). Barbaglia’s sources are
reported to have said that Volkswagen
hopes to raise between 1.4 billion and
1.5 billion euros (up to $1.7Bn) from
the sale of Ducati, valuing it at 14-15
times its earnings before interest,
taxes, depreciation and amortization
(EBITDA) of about 100 million euros.
The German car maker wants a
valuation that reflects trading multiples
of similar trophy assets in the
automotive industry, such as Italian car
maker Ferrari, which trades at almost
30 times its forward earnings.
Indian motorcycle firm Hero MotoCorp
(the company that bought a
$25m/49.4 percent stake in Erik Buell
Racing in 2013) and its rival TVS Motor
Company are said to have also initially
expressed interest in Ducati, but were
put off by its price tag and decided to
walk away, and others, such as BMW,
Honda and Suzuki, who were also
scared off.
See also Comment, pages 4 and 6.
‘Thugnificent’
by Chaos Cycle
Chaos Cycle/George
Stinsman's classy handcrafted
'Thugnificent' was a top 15
finisher at the 2016 AMD
World Championship -
see pages 31 - 33
JULY 2017
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