September 10, 2016

Private Equity invests in the Classics

How hot are classic cars? Surely, you read about the $2.4 million Porsche 993 GT2 .   The classic car market shows no signs of slowing,  despite bubble busting predictions of doom it is now estimated to be a $5.3 billion business worldwide and growing.

This seemingly insatiable thirst for classics is best expressed every September over on Lord March's back yard,  where literally billions of dollars worth of technically obsolete but endlessly fascinating machines are flogged within an inch of their life... and sometimes beyond.

All these wonderful lunatics have to be catered to and classic car preparation has become a huge business.   The leading player in the field is J.D. Classics, based in Maldon ( Essex),  twenty five years in the business offering everything from full restoration to custom builds to race prep and support.  In 2015 it reported sales for over $130M with ebitda of $24.5M for a profit of $18M.

Numbers that attract the interest of Private Equity and this past week it was announced that controlling interest in J.D. Classics was acquired by Charme Capital Partners.  Charme is an Italian based fund led by Matteo di Montezemolo.

Sound familiar? Yes, he's Luca di Montezemolo's son.

Investing along with Charme is a NY based, art and collectibles fund deCar Partners and FiveW Capital.  J.D.'s founder Derek Hood will maintain a significant minority share and the company will have funds needed for expansion and to acquire the inventory of cars needed to keep the whole thing going.

Of course, there is a finite supply of special cars so perhaps that's where the Revival comes in:  if they bend them, or blow them up,  companies like J.D. Classics will be there with the knowledge and expertise to rebuild anything.

Don't lift!

No comments:

Post a Comment

nRelate Posts Only