Author: BAS57
Date: 2018-06-24 20:14
It seems likely that at some point Buffet will be sold again, as ownership has basically shuttled between private equity firms for the last fifteen years.
In 2003, Buffet Crampon was owned by Boosey and Hawkes. To pay off debt, Boosey sold Buffet, Schreiber, and Besson to Rutland Fund Management, a private equity fund known for turnarounds of distressed businesses. The price for all 3 was 33m euros.
In 2005, Rutland sold Buffet to Argos Siditic (another PE firm) for 37m euros. From 2005-2012, Buffet, now known as The Buffet Group, made several acquisitions of other brands like Keilworth and Besson.
In 2012, The Buffet Group was sold to a French private equity firm, Fondations Capital for 58m euros.
The above time lines fit with the fact that PE firms typically have 5-10 year time horizons on their funds. A PE firm will sell acquired companies after that time in order to pay back their own investors.
I do not know anything about Fondations Capital's strategy specifically, so this is all conjecture, but given the typical private equity fund time horizon, Buffet is probably more likely to be sold as time goes on. Buffet was purchased by Fondations 6 years ago and private equity firms generally do not hold companies for more than 10 years.
I also do not know anything about Buffet's current financials, but it seems likely Fondations would be able to sell it for a decent price given that 1) it is currently very easy for PE firms to borrow money with interest rates being so low; 2) investors love strong brands like Buffet and Steinway for a variety of reasons such as they allow for lower customer acquisition costs and allow for some measure of pricing power; and 3) Buffet has acquired other brands like Powell as well.
While all this buying and selling has ensured the growth and survival of Buffet and others, whether any of this activity is good for the quality of the actual clarinets and the musicians who play them is of course still at question. Many of the posters above seem to think quality is deteriorating. Buffet's own input costs can be difficult to control and that can play into it.
At the end of the day, whether or not Buffet is on the block, I'm not sure the sale of the company would generate major changes (positive or negative). Buffet has had private equity owners for 15 years and seems likely to have private equity owners in the future. These owners all have to balance improving profitability with making sure they maintain the perception of the brand among customers as a high quality brand. Failure to do either lowers the value of the company and thus lower their returns. Virtually all the companies/funds that would buy Buffet are subject to these tradeoffs.
Post Edited (2018-06-24 22:19)
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The Clarinet BBoard
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