Audi Bought 100% of Ducati’s Stock

04/19/2012 @ 2:48 pm, by Jensen Beeler19 COMMENTS

Audi Bought 100% of Ducatis Stock ducaudi 635x485

With the Volkswagen Group’s Board of Directors meeting done, ahead of the company’s shareholder meeting which is also now complete, details of Audi’s acquisition of Ducati are starting to emerge.

Paying €860 million ($1.1 billion) for the Italian motorcycle company, perhaps the biggest shocker to come from Audi’s acquisition is not the price, but the unconfirmed reports that Audi AG has bought 100% of the Ducati’s stock, meaning Borgo Panigale will now come under complete German control.

This news means that Audi not only bought out the 70% ownership of Investindustrial, but also the 30% remainder that was held by private equity fund BS, the Hospitals of Ontario Pension Plan, and other minority shareholders.

Unsurprisingly, this also means that Audi has assumed all of Ducati’s financial liabilities, estimated to be in the €180 million to €200 million range. This adjusts Audi’s valuation of Ducati to somewhere just shy of $1 billion, likely in the $850 million to $900 million range, which is considerably less than the $1.3 billion valuation Investindustrial placed on Ducati earlier this year.

Converting into euros instead of dollars, the valuation of Ducati Motor Holding’s business comes out to be €650 million to €685 million, which is a tidy sum for a company that did only €480 million in revenue last year. Some gorilla math pegs this purchase price multiple at around 1.5x Ducati’s revenues, a tad higher than the .9x multiple typically seen in manufacturing, though inline with assessments of Ducati’s intangible brand value.

According to Investindustrial, Ducati posted earnings before interest and taxes of only €51 million, a stark contrast to the €5 million the company was earning when Investindustrial first took ownership of the Italian brand. This figure largely is due to the fact that Ducati had a break-out year, and sold over 42,000 motorcycles in 2011, which helps the Italian motorcycle manufacturer account for 11% of the over-600cc market.

With European anti-trust regulators not expected to stop the acquisition, this week marks the starting point for Audi’s ownership of Ducati. It will be interesting to see what the German brand can do with its new Italian motorcycle company, both strategically and financially.

Source: Infomotori & Investindustrial

Comment:

  1. Afletra says:

    Eh…

  2. Dan says:

    and this is how the Germans rule the world….

  3. Ken C. says:

    Maybe Audi can tell Ducati what to do to get Rossi winning again. :P

  4. Halfie 30 says:

    Everybody still on board with Audi’s acquisition now!? I think not. Bad news!

  5. SPEKTRE76 says:

    Maybe we’ll get those cool looking Audi LED headlights for next years Panigale as seen on the 2012 A4.

    We also may see a V-4 in the future too.

  6. Umm…the Panigale already has LED headlights…

  7. 76 says:

    There will be alittle culture shock from those at Ducati, but as long as both parties involved can weather the storm short term I can see a positive outcome for both the bikes & companies in the long. VW has already proved they can take small exclusive/exotic brands and employ structure and a know how to take what DNA makes that brand special and build on it (On a automotive level). This change will also will come with more structured and formal level of R&D / production. Ducati will also enjoy access to a pool of both designers and engineers on a more advanced concept level I’m betting.

    Honestly I think VW’s motive is simple, continue building the Audi reputation as a top tier exclusive brand by linking the worlds most exotic and well know Superbike brand with their own. I see it like marrying a supermodel, these unions are normally short lived but of course when you marry a supermodel you dont get 100% of her stock (she actually gets alittle more access to yours), that little detail could really put alittle more emphasis on the T in team for Ducati.

  8. +1 to what 76 said. I suspect that the marriage will be a good one for Ducati, as it will benefit from deeper pockets and possibly technology that will make its production and distribution more efficient. Those are both aspects that can only help Ducati in capturing further market share.

  9. Westward says:

    Providing they stay in MotoGp, I wonder, does this mean we could see Bradley or Cortese on the Ducati…

  10. Damo says:

    That’s it I am buying a Triumph!

  11. paulus says:

    I would rather see the owners be automotive than an industrial venture capital group and a pension plan…. wait for the fruits of the union and then decide.

  12. SBPilot says:

    I cringe at Audi buying Ducati because I like Ducati but dislike Audi. Audi as an automaker IMHO is unoriginal and always playing catchup to BMW. Ok, I admit, I am a BMW fan, but I like older Audis too. However, Audi will never stack up to BMW in cars since they are more or less hopped up VWs and never could/will in bikes because BMW has been building bikes for a long long time where Audi has not motorbike history. Of course Audi wants to rival BMW in the bike segment so hey, why not snag a financially troubled iconic Italian brand. Admittedly I think it will do well for Ducati as it did (very) well for Lamborghini. However, it definitely turns me off a bit towards Ducs now that Audi owns it…

  13. coolbiker says:

    Ducati should consult with Husqvarna ( bought by BMW ) to find out more about the Germans running their life

  14. TJ says:

    @SBPilot
    “BMW has been building bikes for a long long time where Audi has not motorbike history”
    Actually, they have a “history” in the two wheeled business. Look up NSU and DKW.

    Anyhow, the question emerges – whether it is important to have such history or not. BMW was new for bikes in the 1920’s, Ducati started motorcycle business only after WWII. Both came far so long…

  15. BikePilot says:

    I doubt it’ll go anything like the BMW-Husqvarna abomination. BMW built crappy dirt bikes and had no brand value with dirt bikers so needed a sticker with some off road cachet to slap on its crappy dirt bikes and some help making its bikes slightly less crappy, and it got that plus some. In the future it might even make a good dirt bike, its proven with its superbike that it can make something that’s light and fast.

    Audi doesn’t make bikes, but wants to make money. It’ll be in its best interest to see to it that ducati continues to build its bikes and brand in the way that’s lead to their fantastic recent success. With Audi’s cash, business knowledge, manufacturing IP, etc., it outta be able to do awesome as long as it doesn’t meddle too much with the Ducati designers and engineers.

  16. Jake says:

    With German precision and Italian passion, what’s the worst that could happen?

  17. BikePilot says:

    The worst? German passion and Italian (strike that, Chinese) precision =p

  18. Ryan says:

    A lot of the comments I read on this blog and other automotive blogs contain similar sentiments to what SBPilot has shared. Unfortunately, believing that Audi being German or having little two-wheel experience will at all affect Ducati is pretty simple minded to say the least. What two-wheel experience do venture capitalists have? How would you describe the product nationality of the investment firm that sold Ducati?

    TLDR: Don’t be daft. Audi’s acquisition makes sense for both parties and will not affect the soul of the new Ducatis.

  19. SPEKTRE76 says:

    @Jensen Beeler

    I know my good sir. I mean t I hope that we get them so that the have that little white outline wrapped around the headlamp assembly.

    http://www.m25audi.co.uk/images/audi/a6/new-audi-a6-led-headlights-02.jpg