Charme eyes overseas growth for its classic car business

The Italian buyout firm, which this month bought its first UK-based company, JD Classics, says premium classic cars are in high demand in markets like the US, the Gulf and Singapore.

Charme Capital Partners is eyeing overseas expansion for JD Classics, the UK-based classic car business it acquired earlier this month, partner Christopher Fielding tells Private Equity International.

JD Classics specialises in premium classic cars such as Jaguars, Aston Martins, Porsches, and the like. The company has been expanding fast, with revenue growth surpassing 30 percent a year over the past two years.

“If a customer would like to gain entry to an exclusive race or event, such as the Mille Miglia [in Italy], JD Classics can assist,” Fielding said.

The company can source a specific classic car, such as a C Type Jaguar, and then teach the customer how to race it, he said. In addition, JD Classics offers a range of ancillary services to its ultra high net worth customer base, from valuing the cars to building, restoring, upgrading, and storing them.

Charme announced the buyout of JD Classics, its first UK acquisition, on 7 September, just over nine months after the mid-market private equity firm launched its London office. The firm bought its majority stake for an undisclosed sum, using financing from its latest private equity fund, Charme III, which is still on the road. The fund has already exceeded its €500 million target, PEI reported on 20 July.

A business like JD Classics fits Charme’s strategy of acquiring national champions and growing them by expanding internationally and making operational improvements. As a definitive global player has yet to emerge in this sector, the company could look to become the first international full-service “super-dealer” in the classic cars market.

Fielding said Charme will build JD Classics’ business in three key ways.

The first is by forging strategic partnerships in new markets; the second is by making targeted bolt-on acquisitions; and the third is by rolling out retail across the world. The west coast of the US, the Gulf and Singapore are all examples of areas with high demand for JD Classics’ premium offering.

Founder Derek Hood, who built the business over the past 30 years, is retaining a minority stake in the company – understood to be about 40 percent – and will re-invest alongside Charme.

In addition, a group of minority investors led by deCAR Partners and FiveW Capital also invested in the business. DeCAR Partners is a growth capital investor focusing on the fine art, vintage luxury and collectibles markets, while FiveW is a private investment firm led by founder Randall Winn, the co-founder and former chief executive of Capital IQ, a global financial information provider sold to financial intelligence company McGraw Hill Financial in 2004.

JD Classics has a showroom in London’s Mayfair and an engineering and sales complex in Maldon, Essex, employing 60 specialist technicians, craftsmen, and engineers, according to its website.

Charme’s investment in JD Classics is the second to be made from Charme III so far, and follows the July 2016 acquisition of Spanish reproductive genetic testing company Igenomix.