Princess doing well

MapisM said:
How true - and how sad.
PE investors made silly amounts of money with pleasure boats for a longish period, and now they are scared by the losses.
If only they would have asked to an old boatbuilder (and I mean, ANY old boatbuilder) before targeting this industry, he would have warned them that this has always been a roller-coaster market.
Ok, the last crisis was arguably the worst and the longest. Even more so, relatively speaking, because it happened right after the stronger and longer bubble. But, so what?
The fact that some folks whose job is essentially to understand how a business is like, in order to decide when it's time to buy or sell it, are now "scared" by an industry (regardless of which), goes a long way in telling how amateurs they are.
Sounds like deciding to not have showers anymore after one when the heater was off and the water was too cold...
Not that I find this surprising, anyway. :ambivalence:
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Tee hee! "Scared" wasn't literal - it was shorthand for a complex negative situation. There is no such thing as a bad investment; the problem is only misjudging the value, ie overpaying. If L (now L Catterton) had paid say €50m for Princess they'd be in decent shape now. The general situation today is that buyers are negative on the yacht industry so are bidding lowish prices, whereas sellers want more.
Remember there are many more financial buyers who didn't buy these yachting companies. As I may have mentioned before I was close to the Ferretti, Bavaria, Oyster transactions and "my team" looked v carefully but positively decided not to buy at the prices being bid, as did many many other potential buyers (you did not need to be able to predict Lehmans 2008 to decide that those companies were too expensive). As for asking a boatbuilder, I'm not sure the evidence tells us that helps: Norberto Ferretti himself was an equity investor in the ill-fated Ferretti 2nd buyout, and the longstanding CEOs and senior management teams in Princess, Fairline and Bavaria invested in those deals. I wasn't close to Canados and don't know who sold the company and whether the CEO invested alongside Balmoral, but you might know.
Anyway it's all kinda ancient history now I suppose :)
 
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I now see how this business buying thing works. So what is undervalued by the seller at the moment but really popular with buyers and has a great future ahead of it :)

I am very fast learner. That 40m is progressing well with the second stage of the £20m funding in place. I have lodged another £20 into my TSB super saver account......

Henry :)
 
jfm said:
Tee hee! "Scared" wasn't literal - it was shorthand for a complex negative situation. There is no such thing as a bad investment; the problem is only misjudging the value, ie overpaying. If L (now L Catterton) had paid say €50m for Princess they'd be in decent shape now. The general situation today is that buyers are negative on the yacht industry so are bidding lowish prices, whereas sellers want more.
Remember there are many more financial buyers who didn't buy these yachting companies. As I may have mentioned before I was close to the Ferretti, Bavaria, Oyster transactions and "my team" looked v carefully but positively decided not to buy at the prices being bid, as did many many other potential buyers (you need to be able to predict Lehmans 2008 to decide that those companies were to expensive). As for asking a boatbuilder, I'm not sure the evidence tells us that helps: Norberto Ferretti himself was an equity investor in the ill-fated Ferretti 2nd buyout, and the longstanding CEOs and senior management teams in Princess, Fairline and Bavaria invested in those deals. I wasn't close to Canados and don't know who sold the company and whether the CEO invested alongside Balmoral, but you might know.
Anyway it's all kinda ancient history now I suppose :)
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Yeah, all water under the bridge now.
And no, I don't know anything about Canados aside from what was publicly disclosed.
I just half remember that Balmoral sent someone with a background from P&G and other consumer goods industries to manage the yard - as if there weren't already good enough reasons for going bankrupt, which is in fact what happened just a few years later.

I have one objection to what you are saying about NF or other yard founders though, because it's only logical to expect them to be good at THEIR job - i.e. building boats, but it's not so surprising that they are amateurs in the PE game, where they were "only" lured into the idea of making a big one off lump of money, and then continue to do their job, making even more of it in the future.
Not that this is a trivial reason, mind - hence my "only" in brackets. :rolleyes:

It's within the PE business itself, that imho there's a shocking number of folks who are amateurs in their own business, and they could as well throw a dice to make their decision, without any worse results...
...as a consequence, after a wrong buying decision, they pretend (they actually do also after a good decision, whenever they want to get out, but let's say that they pretend that even more) to massage the accounting in order to improve the result before handing the hot potato off to someone else.

Which is the reason why I replied to henry's post about EBITDA as I did, btw.
And before you mention it, yup, I know that biggish companies are audited.
But I don't think it takes more than two words - Lehman and AAA - to explain why I don't exactly hold in high esteem also the professionalism/integrity of rating agencies, auditors, and the like.

That said, as with all generalizations, there are exceptions, of course.
I'm aware, as you say, that some PE investors declined offers at the silly pre-crisis EBITDA multipliers, and as it turned out they were correct. Good for them.
But several others did, against all odds... And not just in the boating industry! :ambivalence:

Bottom line, if there's a big difference with the investment bankers approach to business, very effectively explained by Bird and Fortune (RIP) in their famous sketches, I don't know what it is... :D

 
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