Breaking news: PPR in talks to acquire Richard Mille

The news has just broken that French luxury conglomerate PPR is in talk to buy a controlling share in Richard Mille, valuing the company at CHF340-400 million.

Richard Mille RM059-01 Yohan Blake

Rumours have been swirling for months about Richard Mille being acquired by PPR and they have proven to be true. According to an anonymous source close to the deal quoted by Reuters, PPR is looking at acquiring a controlling, 51% stake in Richard Mille. The valuation is 2.5 to 3 times expected 2013 revenue of CHF135 million, valuing the whole company at CHF340-400 million. Richard Mille had revenue of CHF112 million last year, with sales growth in recent years consistently above 10%. And its earnings before interest, tax, depreciation and amortisation (EBITDA) to sales ratio exceeds 40%, amongst the highest in watchmaking – unsurprising given its watches start at about US$80,000 and its lightest-watch-in-the-world is US$690,000. Richard Mille would continue as shareholder and CEO for several years under contract, and Audemars Piguet would retain its 10% stake as well. If it goes ahead the deal is unlikely to conclude before 2014, as Mr Mille needs time to settle his private affairs. PPR, which is expected to change its name to Kering, already owns the Sowind Group, which comprises Girard-Perregaux and JeanRichard. – SJX Source: Reuters

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