InvestIndustrial will acquire a 37.5 percent stake in Aston Martin for €190 million through capital increases. The transaction enables the British luxury car designer and manufacturer to develop new cars within the next five years.
InvestIndustrial, an Italian private equity firm with €3 billion assets under management agreed to buy 37.5 percent stake in Aston Martin Lagonda Ltd. from Investment Dar, the indebted parent company of sports and luxury car designer and manufacturer, according to the report from Wall Street Journal.
According to InvestIndustrial, the total amount of its investment in Aston Martin through capital increases is around €190 million or $246.4 million. Investment Dar will use the capital infusion to develop new cars for the British luxury brand. The transaction will increase the enterprise value of Aston Martin to approximately €940 million.
The report from Wall Street Journal cited that InvestIndustrial beat Mahindra & Mahindra Limited (BOM:500520), an Indian automaker in the bidding to acquire a stake in the British luxury car designer and manufacturer. Last April, the Italian private equity firm, sold Ducati Motor Holding SpA for € 860 million to Audi, a unit of Volkswagen AG (PINK:VLKAY) (PINK:VLKPY).
The agreement between InvestIndustrial & Investment Dar allows Aston Martin to invest €625 million within the next five years to design and manufacture new cars. The transaction is subject to antitrust clearance.
In a statement, Andrea Bonomi, senior principal at InvestIndustrial said, “We are looking forward to working with the management of Investment Dar to achieve a similar transformation and rejuvenation that we achieved with Ducati, by expanding the model range and strengthening the dealership network throughout the world.”
Aston Martin reported earnings of €101 million (EBITDA) and €634 million sales in 2011. The British luxury sports car manufacturer had been struggling for years. Last week, the company reported that it sold 2,340 cars as of September 30. The result is 19 percent lower than the previous year.
Max Warburton, analyst at Bernstein Research estimated in his previous research note that Aston Martin is making less than 5,000 cars this year. Aston Martin is famous for its connection with the movie James Bond.