The private equity firm Partners Group becomes the majority shareholder of CVC Breitling away. Alfred Gantner is to take over the chairmanship of the board of directors at the watch manufacturer.
One of Breitling’s most famous models: the Navitimer.
The Partners Group acquired a stake in the luxury watch manufacturer Breitling back in October 2021. At that time, the Swiss private equity company bought a “significant minority stake” from the previous owner, the financial investor CVC based in Luxembourg.
Fourteen months later, the next step follows: As announced on Friday, the group is increasing its stake and becoming Breitling’s majority shareholder. In return, CVC reduced its stake a second time.
Exact ownership unclear
On request, the investment company does not want to reveal how large the majority stake of Partners Group is. According to the industry portal Finews.ch, the according to its own statements, had access to documents relating to the transaction at the beginning of December, this could only be 50.3 percent. CVC would therefore still hold a good 23 percent, the management around CEO Georges Kern 2.8 percent.
A further 23 percent would be held by third parties, although these are probably investors who have given the Partners Group a corresponding mandate and whose voting rights are exercised by the financial investor. This is indicated by the wording in the communiqué that control of Breitling still lies with the trio of Partners Group, CVC and management team.
Gantner becomes Chairman of the Board of Directors at Breitling
Alfred Gantner, one of the founders of the Partners Group, will take over as Chairman of the Board of Directors of the watch manufacturer after the transaction. Gantner is already sitting at the Partners Group on the Board of Directors and has also sat on the supervisory board of numerous portfolio companies such as Rheintaler VAT or Careismatic Brands.
The fact that the Partners Group is increasing its commitment is not surprising given that the Swiss watch industry is currently experiencing a boom. Watch exports have risen by more than 12 percent this year and are expected to reach a record level of almost 24 billion francs. Apart from the extremely popular, inexpensive Moonswatch, more expensive, mechanical watches are in demand. This is the category in which Breitling is also at home. According to Kern, the average price of a Breitling today is over 6,000 francs; five years ago it was 5,000 francs.
Breitling is growing faster than the market
But Breitling has not simply grown “with the market” in recent years, but much more. Annual production should now be around 250,000 watches, with sales of 900 million francs. This means that Breitling will soon be one of the exclusive club of brands that generate sales of more than one billion francs (see graphic). A good five years ago, when Kern took over the helm on behalf of CVC (and as co-owner), amounted sales are estimated to be less than half. More importantly, according to Kern, Breitling has become extremely profitable, as he emphasizes when asked.
The strong growth of the brand is not least the result of a reorientation. While the previous owners had focused almost exclusively on pilot’s watches and thus a largely male clientele, the range is now much more diverse, with sporty but also elegant watches and a wide range of sizes. According to Kern, there was no need to invent any new collections. It was enough to sift through the rich store of the brand founded in 1884 and to modernize historical models.
IPO still the goal?
When Partners Group got on board last year, it was said that it was planned to list Breitling on the Swiss stock exchange in a few years. Nothing is mentioned in the communiqué about these plans. According to reports, an exit via an IPO is still the goal, but not until 2027. Until then, the owners plan to create a lot of additional value.