Bavaria Yachts completes purchase agreement

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The yacht builder has announced that its crafts will now be built 100% in Germany and it will reduce its models from 26 to 10-12.

After going into administration last April, the entire Bavaria Yachtbau business, including its French subsidiary Bavaria Catamarans S.A.S, was bought by private equity fund, CMP Capital Management-Partners last September.

Now Bavaria has announced that the purchase agreement has been completed and the company will build its boats 100% in Germany.
Bearing the seal of quality “Made in Giebelstadt”, both sailing and motor yachts will be manufactured and handed over to customers in Franconia.

For the first time, its R55 motor yacht, which was previously produced in Croatia, will be hand-built at the company’s headquarters in the first half of 2019. The moulds and tools are currently being transported from Croatia to Germany and installed in the Bavarian town of Giebelstadt.

Managing Director Erik Appel, who has been Chief Operating Officer of Bavaria Yachts since December 2017 explains: “We want our outstandingly well trained and committed employees to develop and build all our yachts primarily under own management. The workforce identifies strongly with Bavaria Yachts; it is the key feature of our company.

“This is why we intend to further increase our permanent staff and simultaneously reduce the proportion of temporary workers. This will help considerably to bring down production costs. To increase the efficiency of the shipyard, we will concentrate on our own engineering, i.e. the technical development of yachts, at Bavaria Yachts once again. Interdisciplinary teams have already been formed.

We will organise the handover of newly developed models from engineering to production better and thus reduce costs. Engineering and joinery will continue to be core in-house competences.”

Out of Bavaria Yachts’ current portfolio of 26 models, the company will now focus on 10 to 12 key craft, launching two to three new models per year.

“Our model range will be more attractive and at the same time of a highly reliable quality, with a portfolio of the same size,” adds Erik Appel.

Bavaria Yachts will cease production of the BAVARIA C65, which was launched in 2018 but has not proved successful. The E-Line (electric propulsion and hybrid yachts) has been discontinued whilst the C50 sailing yacht has been removed from series production and technically reworked as a prototype. Following successful re-engineering, the C50 will return to series production from November 2018. The re-engineering work will also be applied to the flagship BAVARIA C57 and its little sister BAVARIA C45. The C57 is already back on the production line.

The French holding “Bavaria Catamarans” will in future revert to its “Nautitech” name for marketing purposes. Dr. Ralph Kudla, a partner at CMP, who is now a Managing Director of Bavaria Yachts said: “Bavaria stands for yachts, Nautitech for catamarans. We believe that it is important for the two companies to be able to highlight their respective identities even more clearly in future. The two firms will collaborate closely in technical matters and develop the partnership between Germany and France even more vigorously.”

Kai Brandes, Executive Partner of CMP Capital Management-Partners from Berlin, which represent and advise the investing equity fund, explains: “We are delighted about the successful conclusion of the transaction: The purchase agreement has been signed, the approval of the Federal Cartel Office has been given and the closing, i.e. the fulfilment of all contractual conditions, has just taken place. This means security for the employees, for the customers and for the suppliers.”

CMP Capital Management-Partners has been an investor in the German-speaking SME sector since 2000. “As an active investor, we pursue an operational and entrepreneurial investment philosophy. We concentrate on companies that have a healthy operational core but which find themselves in a situation of necessary change,” says Kai Brandes, who is also Chairman of the Advisory Board of Bavaria Yachtbau Holding GmbH. “We believe in the development potential of Bavaria and we are impressed by its loyal employees, dealers and customers. A good investment for a good price.”

Christian Hartmann, the Works Council Chairman of Bavaria Yachts, added: “The purchase agreement is now all wrapped up, all 800 jobs in Giebelstadt and in France have been secured. We consider the fact that CMP strongly supported the purchase of the company a good signal.” For the future, Hartmann is counting on closer integration of sales and production: “We see production and sales as cornerstones, carrying the company together. Optimum planning in construction, a continuous production process and a sales division that synchronises customer requirements with production, are to be the hallmark of Bavaria Yachts in future. We as the workforce would also appreciate closer involvement in the further development of production and sales. The people who work on the yachts every day are enormously important for improving existing procedures and methods.”

Bavaria is expecting to show a loss for the current financial year, but believes it will break-even for the next one (1 August 2019 to 31 July 2020). The key changes to the shipyard are expected to show results in two or three years.

Dr. Ralph Kudla adds: “We want to regain lost trust. We intend to keep Bavaria’s promises and meet its delivery dates. Quality must also improve again. And we want to involve our dealers more closely in strategy and product development. A dealers’ advisory board will be introduced to this end. In this way, we will hear customer feedback, pick up on it and turn it into product improvements as quickly as possible.”