European mid-market firm Balmoral Capital has completed its second investment, buying UK yacht builder Oyster Marine for an undisclosed sum, according to Richard Winckles, managing partner of the firm.
Oyster Marine had sales of more than £50 million (€97.6 million; $73.6 million) last year.
Winckles said the company was largely recession resistant as it provides boats to high net-worth individuals whose dream it is to own their own vessel. “Often they’ve made their money and are in their 50s and it’s a life style choice,” he said.
Oyster Marine has 18 months forward orders and inquiries in the London Boat Show, a trade show, were nearly a quarter up on last year despite less people attending the event, he said. The company presently makes 40 boats a year and charges an average £1.2 million.
Last year Balmoral bought luxury Italian motor yacht maker Canados, although Winckles said the plan was to manage the two investments separately. Balmoral aims to invest across sectors such as leisure, engineering and food.
The firm’s fundraising from 2004 to 2006 was challenging, according to Winckles, who declined to disclose the names of Balmoral’s investors nor the amount of capital the firm has raised. The firm’s initial target in 2004 was €600 million ($884 million). It initially worked with placement agent MVision on the fundraising.
Winckles said: “The fundraising was very difficult frankly. All I can say is you should try raising a first time fund. It is difficult to get a first time fund away and there was concentration around brand names with a surge of money towards the recognised funds in 2005 to 2006.”
Winckles founded the firm, which invests in businesses with enterprise values of between €30 million to €350 million, with Alec D’Janoeff, the two having met working at Schroder ventures, the firm that became Permira. They then went on to work together at Credit Suisse First Boston Private Equity, where Winckles was a managing partner and D’Janoeff a managing director.
Winckles said he liked working in the mid-market as he feels he is able to spend more time working with management than if he were to work on mega buyouts: “I know someone who was working on a huge transaction at one of three firms and he didn’t even get to meet the management,” he said.