LVMH to Acquire the Deus Ex Machina Brand?

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Like the word “cool” itself, it is hard to describe what exactly Deus ex Machina is, especially to the uninitiated. The motorcycle/surf lifestyle brand is 10 years old now, and will go down in moto-history as being partially responsible for the “post-authentic” motorcycle movement.

The easiest explanations is that the Deus ex Machina brand is known both for its two-wheeled creations, and also its destination stores in Sydney, Bali, Japan, Los Angeles, and Milan.

In talks now with L-Capital, the private equity arm of LVMH (which is better known for its Louis Vuitton, Moët, and Hennessy brands), Deus ex Machina looks to be the second major exit for its founder and majority shareholder Dare Jennings, who sold his Mambo brand to Gazal Corporation back in 1990.

According to the Jennings, Deus ex Machina pumps out roughly $25 million (AUD) in revenue each year, which means that the brand should be worth roughly the same amount on the investor market, given the typical 1x revenue multiple found in the fashion industry.

The presumption is that whoever buys Deus ex Machina will expand the company’s presence into other locations beyond its current five stores, likely with a focus on artisanal motorcycle enthusiasts.

The news of the pending sale is surely a sign that Jennings hopes to leverage a larger offer for Deus ex Machina, either from LVMH or another interested party – of which, there are said to be several of the latter.

He will of course have to show that there is a future in the post-authentic motorcycle scene, and that the movement isn’t merely a fleeting fancy of artistic millennials.

We are not too sure on that last account, but as always, time will tell.

Source: Financial Review (Sub Req’d) via AutoEvolution