Blackstone in talks to sell stake in Leica

[wlaidlaw]

Advertisement (gone after registration)

The extent of Leica and Zeiss' "chumminess" can be judged by the absence of coding on the ZM lenses for the last 11 years. You would have thought there would be a discussion along the lines of: "You buy all your glass from our Schott division, how about a sweetheart deal on coding for our ZM lenses"? Mind you that would have done our friend Malcolm Taylor out of a lot of business 

 

Wilson

[earleygallery]

Leica is quite different since Blackstone invested. More product lines, presumably greater sales levels, more Leica stores and their new premises. I reckon they'll be making a profit on their investment when they find a buyer. 

 

What is odd however is that they didn't just announce a sale, which suggests to me that the obvious subjects were possibly not interested. I'd have  expected a sale in principle at least prior to any announcement. 

 

I personally feel that Blackstone wanted to make Leica a more diverse brand with more products aimed at the more 'consumer' end of the market. Dr Kaufmann on the other hand sounds like he has his own very definite ideas of what he wants to do with Leica. If I'm right I don't see a sale to Panasonic or any of the other obvious brands.  

[Advertisement]

The Leica Q3 is available for pre-order at B&H Photo Video and Adorama

[Go Figure]

German DNA speculations left aside , Jaap ... we all know LCA1 stock is privately held since 2012 ... so since A.K. want's his cell phone expansion 

> that's where the $$$ are .... forget cameras .... 

Chinese investment might be a strong option.

I don't think it's going to be Qatar as they just spent 1/2 a billion on PSG player additions. 

Putin might be PNG ( persona non grata)  ... the GB island people are still brexitting ... Apple too narcissistic ...

and the Dutch too calvinistic ... although they had a marginally small historic Gstar Raw nonevent 

[willeica]

The extent of Leica and Zeiss' "chumminess" can be judged by the absence of coding on the ZM lenses for the last 11 years. You would have thought there would be a discussion along the lines of: "You buy all your glass from our Schott division, how about a sweetheart deal on coding for our ZM lenses"? Mind you that would have done our friend Malcolm Taylor out of a lot of business 

 

Wilson

 

That sounds like a better deal for Zeiss than for Leica. For what its worth, personally I would never add six bit coding to a lens that does not have it already.

 

 

Leica is quite different since Blackstone invested. More product lines, presumably greater sales levels, more Leica stores and their new premises. I reckon they'll be making a profit on their investment when they find a buyer. 

 

What is odd however is that they didn't just announce a sale, which suggests to me that the obvious subjects were possibly not interested. I'd have  expected a sale in principle at least prior to any announcement. 

 

I personally feel that Blackstone wanted to make Leica a more diverse brand with more products aimed at the more 'consumer' end of the market. Dr Kaufmann on the other hand sounds like he has his own very definite ideas of what he wants to do with Leica. If I'm right I don't see a sale to Panasonic or any of the other obvious brands.  

 

Yes, Leica is doing well, but the trends in the camera/imaging market for the last 5 or 6 years since the Blackstone deal are plain to see. This could affect valuations of potential deals. A multiple of 10 times earnings or more is difficult to achieve unless you have a very secure market (natural monopoly type) and premium pricing which can be maintained into the future. As the company is private there is no stock market valuation to fall back on.

 

The progress of this will be interesting to observe. Leica will be a good investment, but only for the right buyer.

 

William

Edited August 3, 2017 by willeica

[Go Figure]

Leica is quite different since Blackstone invested. More product lines, presumably greater sales levels, more Leica stores and their new premises. I reckon they'll be making a profit on their investment when they find a buyer. 

 

What is odd however is that they didn't just announce a sale, which suggests to me that the obvious subjects were possibly not interested. I'd have  expected a sale in principle at least prior to any announcement. 

 

I personally feel that Blackstone wanted to make Leica a more diverse brand with more products aimed at the more 'consumer' end of the market. Dr Kaufmann on the other hand sounds like he has his own very definite ideas of what he wants to do with Leica. If I'm right I don't see a sale to Panasonic or any of the other obvious brands.  

your personal feel does not fail you ! ... and eventually BS opened AK's eyes and he finally saw where the money really is 

[pico]

 Leica will be a good investment, but only for the right buye

 

I don't find a gross revenue of about 380 million dollars, with non-disclosed expenses, partner disclosure losses, and other out-costs a terrific investment.

.

Edited August 3, 2017 by pico

[UliWer]

Advertisement (gone after registration)

I think the article underestimates the strength of german provincialism. Leica and Zeiss share a region where a large proportion of the workforce is employed in the optical industry. Families and marriages are often 50-50 Zeiss-Leica, they drink in the same Biergarten, company secrets are shared on the marital pillow. Who can tell the strength of the grassroots connection?

Well, I was born 50km away from Wetzlar, and the provinicialism is not completely new to me. Though I am sure those "grassroots connections" will not even be considered when someone has to decide if he wants to invest some 100 mio €. Bye the way the connection to Zeiss in Wetzlar is limited to sports optics - a segment where both are fierce contenders, so a merger of the main german suppliers on this rather small market may even meet some problems as far as antitrust regulation is concerned. Leica produces their sports optics in Portugal, Zeiss in Croatia - so even the sharing of pillows doesn't go too far.

 

I think it was at the meeting of the Forum with Leica on the 2012 Photokina, when Dr. Kaufmann was asked about the share deal with Blackstone. He explained that he wanted to raise money for future investments - but the banks only offered very bad conditions for a loan. So the Blackstone Investment was much better for him. He also made a point that the Blackstone investment was very limited - as far as time as well as influence was concerned.

 

If one wants to get an impression how things might go, one may look at the other Blackstone investment in Germany: Jack Wolfskin. In July 2017 - suprise? - it was made public that Blackstone sold its share in Jack Wolfskin - to other hedgefonds with a big loss of more than 300 Mio €. The difference is: Jack Wolfskin never came out of debt, while Leica Camera AG has no significant debt at all:

 

http://www.spiegel.de/wirtschaft/unternehmen/jack-wolfskin-outdoor-ausruester-gehoert-jetzt-hedgefonds-a-1156226.html

Edited August 3, 2017 by UliWer

[willeica]

I don't find a gross revenue of about 380 million dollars, with non-disclosed expenses, partner disclosure losses, and other out-costs a terrific investment.

.

 

That's why I mentioned the 'right buyer'. Those with potential synergies may be unwilling to invest, however. This could be a difficult process, but if Blackstone want to 'flip' in order to sort out their portfolio, they will do so.

 

If it happens, it will be interesting to observe and predict where Leica, the camera brand, might be heading.

 

William

[jaapv]

I don't find a gross revenue of about 380 million dollars, with non-disclosed expenses, partner disclosure losses, and other out-costs a terrific investment.

.

it is not a public company. Those figures will certainly be available to potential investors but not to the general public.

[UliWer]

You can read the figures - though only from last year - here:

 

https://www.bundesanzeiger.de/ebanzwww/wexsservlet

 

Search with "Leica" and you'll find all annual reports until 2015/16 from Leica Camera AG and also for ACM.

 

(unfortunately only in German,..)

[wlaidlaw]

You can read the figures - though only from last year - here:

 

https://www.bundesanzeiger.de/ebanzwww/wexsservlet

 

Search with "Leica" and you'll find all annual reports until 2015/16 from Leica Camera AG and also for ACM.

 

(unfortunately only in German,..)

 

If you open in Chrome it will auto-translate for you. As far as I can see in the year to 31 mar 2016, Leica Camera made a loss of €453,883. I assume since they are not available, the figures to Mar 2017 have not been submitted/published as yet. Not very encouraging to a prospective purchaser. I think that 2015/2016 period that would cover the moving back from Solms to Wetzlar, which would have had a knock on effect on production and incurred a lot of expense. One might hope the 2017 report will show an improvement. 

 

Wilson

Edited August 4, 2017 by wlaidlaw

[jaapv]

As it is just a bare-bones report, we have no idea what caused the loss. It may be an indication of a structural problem, or it may be the result of a write-off for tax purposes. Who knows?

[UliWer]

Posting deleted for it was completely messed by my browser!

 

To make it short: The number wlaidlaw mentions as a loss is not from the report for Leica Camera Ag Wetzlar but for Leica Camera GmbH Frankfurt, This is the Leica Store at Frankfurt, formerly known as Foto Rahn. Leica bougt it to modernize it and open a Gallery. The data for Leica Camera AG Wetzlar are completely different! Please try to look again.

 

I tried to quote from the report directly but my browser made a mess. I'll try again this evening with another device.

Edited August 4, 2017 by UliWer

[wlaidlaw]

Posting deleted for it was completely messed by my browser!

 

To make it short: The number wlaidlaw mentions as a loss is not from the report for Leica Camera Ag Wetzlar but for Leica Camera GmbH Frankfurt, This is the Leica Store at Frankfurt, formerly known as Foto Rahn. Leica bougt it to modernize it and open a Gallery. The data for Leica Camera AG Wetzlar are completely different! Please try to look again.

 

I tried to quote from the report directly but my browser made a mess. I'll try again this evening with another device.

 

Uli, 

 

Many thanks for that clarification. I thought the turnover numbers were very small. 

 

Wilson

[wlaidlaw]

I have found the correct link for Leica-Camera AG's accounts as far as my German goes it looks like for the period to 31.Mar.2106 there was a gross operating profit of €38,409,747 which is a far rosier picture. 

 

Wilson

Edited August 4, 2017 by wlaidlaw

[jankap]

If you open in Chrome it will auto-translate for you. As far as I can see in the year to 31 mar 2016, Leica Camera made a loss of €453,883. 

Wilson

 

Half a million? Peanuts!

Jan

[paul chiu]

An Otus lens on our Leica M bodies sound interesting.

[willeica]

An Otus lens on our Leica M bodies sound interesting.

 

God forbid!

 

William

[Guest]

Anything is more interesting than Neymar.

[Advertisement]

Hallo,

Look here: Interesting Leica gear

[helged]

An Otus lens on our Leica M bodies sound interesting.

 

 

God forbid!

 

William

 

 

It's just a question of an adapter  - already available from e.g. Novoflex. The M+Otus combo is about as unbalanced as it can be. No surprise there...