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Partners Group buys into CVC-backed luxury watchmaker Breitling at $3bn EV, eyeing IPO in a few years

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Partners Group has agreed to acquire a significant minority stake in Swiss watchmaker Breitling from CVC Capital Partners as it predicts a 6% CAGR growth in the luxury watch segment between 2021 and 2024. The firms said they planned to bring the company to an IPO in a few years’ time.

AltAssets sources put the enterprise value at $3bn, in line with the figure cited by Bloomberg.

The centenarian watchmaker has a unique heritage in the industry and a particular positioning as a casual, inclusive and sustainable luxury brand, Partner Group said, adding that it benefits from macro and sectoral growth trends, especially in Asia due to rising disposable income amongst the middle classes.

Partners Group and CVC Capital said they aimed to grow Breitling’s direct to consumer sales channels, expand the company’s own retail network – especially in Asia and the US – and improve operational efficiency.

Alfred Gantner, co-founder and executive member of the Board of Directors at Partners Group, said, “Breitling is an iconic Swiss brand whose watches are instantly recognisable around the world for their quality and style. Under the leadership of Georges Kern, the Company has enjoyed significant growth in recent years, and we believe it has significant potential to capture a wider audience of consumers globally. We wholeheartedly look forward to working with Georges and the CVC team to realize this next stage of growth for Breitling.”

Daniel Pindur, partner at CVC Capital Partners, said, “We are proud of the fantastic progress Breitling has made since we invested in 2017. Working in close partnership with Georges and his team, we have been able to significantly accelerate Breitling’s growth, through a repositioned brand, a rejuvenated product offering and a continued digitization of the business. We are very pleased to be bringing Partners Group on board and look forward to working closely with them to continue to grow this iconic business further and ultimately target an IPO in a few years’ time.”

Partners Group raised $6bn for the final close of its fourth flagship direct equity fund, and another $9bn through related private markets programmes and bespoke client solutions that will invest alongside the fund last month.

CVC reportedly hauled in €21.3bn for a final close of its eighth flagship fund in July last year, smashing its initial €17.5bn target.

Dealmaking has been active this year with private equity firms eyeing post-pandemic demand surge. LVMH-backed buyout house L Catterton bought into luxury fashion house Etro in July also eyeing expansion in Asia.

Altamont Capital Partners has agreed to carve out Gap’s luxury fashion boutique business Intermix in May as it eyed a resurgence in social events as Covid-19 eased.

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