It's done: Aston Martin sold for $925 million
The deal is done, and it happened exactly the way everyone expected it to. Ford Motor Company has sold Aston Martin to a consortium led by Prodrive founder David Richards, Aston Martin collector John Sinders, and Investment Dar and Adeem Investment Co, two international investment companies headquartered in Kuwait. The sale price is for $925 million, and Ford will retain a $77 million stake in the sports car maker, [Source: Ford]
PRESS RELEASE:
FORD ANNOUNCES AGREEMENT TO SELL ASTON MARTIN
DEARBORN, Mich., March, 12, 2007 – Ford Motor Company [NYSE: F] announced today it has entered into a definitive agreement to sell Aston Martin, its prestigious sports car business, to a consortium comprised of David Richards, John Sinders, Investment Dar and Adeem Investment Co. This transaction is the result of Ford's decision, as announced in August 2006, to explore strategic options for the Aston Martin business as the company restructures its core automotive operations and builds liquidity.
The sale is expected to close during the second quarter and is subject to customary closing conditions, including applicable regulatory approvals. The transaction values Aston Martin at £479 million ($925 million). As part of the transaction, Ford will retain a £40 million ($77 million) investment in Aston Martin. Other terms and conditions specific to the sale are not being disclosed at this time.
"The sale of Aston Martin supports the key objectives of the company, to restructure to operate profitably at lower volumes and changed model mix and to speed the development of new products," said Alan Mulally, Ford's President and chief executive officer. "From Aston Martin's point of view, the sale will provide access to additional capital, which will allow Aston Martin to continue the growth it has experienced under Ford's stewardship. Today's announcement is good for Ford Motor Company, good for Aston Martin and good for the UK. We wish Aston Martin every possible success for the future."
The new owner of Aston Martin is a consortium comprised of: David Richards, founder and chairman of Prodrive, a world-leading motorsport and automotive technology company; John Sinders, an avid Aston Martin collector and a backer of Aston Martin Racing; and Investment Dar and Adeem Investment Co, international investment companies headquartered in Kuwait.
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles in 200 markets across six continents. With more than 280,000 employees and more than 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo and Mazda. The company provides financial services through Ford Motor Credit Company.
Get a WordPress.com Blog
Reader Comments (Page 1 of 2)
Elliott 11:01AM (3/12/2007)
My understanding of the press release is that AM is worth $925M total. So Ford will be receiving $925M - $77M stock = $848M cash.
Reply
bob 11:33AM (3/12/2007)
Great news. Now A.M. can actually have a proper management team and capital to reach new heights instead of being hampered by Ford.
Reply
idpimp 12:09PM (3/12/2007)
sooooo, that 848 mil cash is going to be half spent on that company wide "bonus" incentives for Ford?
Reply
Infinihertz 11:42AM (3/12/2007)
#1 is correct. Ford is getting $848M and will retain an ~8.3% share in Aston Martin.
Reply
Igor Holas 11:45AM (3/12/2007)
- #2 yeah .. AM suffered greatly under Ford .. I have no idea how they managed to survive .. their models are ugly unreliable and decades beyond time ... people are almost choosing Buicks over those tarted up turds called Aston Martin ... man .. Ford is dead ...
/sarcasm
wow people are clueless - Ford did wonders for AM .. and it is time to spin them off to people with extra cash to take it even further - besides, Ford wants to move Jaguar up close the the AM's "uber luxury" segment.
Igor
Reply
DJ 2:53PM (3/12/2007)
As a result of the sale, I expect the development of the Rapide to step up signifigantly. Every oil sheik in Kuwait, Dubai, the UAE and Saudi Arabia is going to what one.
Reply
Avinash machado 12:16PM (3/12/2007)
This means the British get a locally owned car maker again. Now they can proudly claim that they once again own one of their famous marques.
Reply
Ben 12:19PM (3/12/2007)
#4 ... I agree !!
Negative comments from guys like "#2 Bob" are so tiring.
Reply
Press Department 12:29PM (3/12/2007)
Drat. I was hoping Proton would buy Aston. :)
Reply
Infinihertz 12:45PM (3/12/2007)
#5, I'm sure you're probably just trying to inflame people, but from what I read those bonuses should "only" cost about $40M, not even close to $848M.
That said, I did find the bonuses surprising.
Reply
Khalid 1:27PM (3/12/2007)
I think that bonuses were actually quite necessary. You have to understand the world of corporate America and the fact that the good human capital that could find a job in less than a week needs incentive to stay on board. The bonuses also help convey a sense of confidence for the employees. No one wants to be on a sinking ship. I think currently Chrysler is in the most trouble of the big 3, especially product wise.
Reply
Greg Koenig 1:51PM (3/12/2007)
#2 yeah .. AM suffered greatly under Ford .. I have no idea how they managed to survive .. their models are ugly unreliable and decades beyond time ... people are almost choosing Buicks over those tarted up turds called Aston Martin ... man .. Ford is dead ...
Well, let us be honest here. While Ford did wonders for Aston, they never were able to put in that last 5% to turn the company into what it really could be. Astons DO currently suffer from some major reliability issues (flappy paddle gearboxes anyone?), most people who drive them note that AMs are down on power and the Volvo/Ford sourced switch gear on the interior just NEEDS to go.
This isn't 1960; we have plenty of technology that would allow Aston to build a car that offers the cushy cruising that Aston owners want along with scintillating performance just a button press away so that the company can regain the performance reputation it deserves.
Reply
hashiryu 2:10PM (3/12/2007)
Goodbye Subaru WRC, hello Aston Martin F1?
p.s. Ford did very good for Aston.... anybody who can't see that, need to take off the hater goggles
Reply
David 3:04PM (3/12/2007)
Aston Martin reached new heights under Ford. But I can see why they sold it - better to sell a business while it's doing well than in the dumps (Chrysler!) Take the money and run!
I will look forward to buying a revitalized Jag than the independent Aston Martin. The cars are too complicated these days for an independent mfg to get right. I see Aston Martin going backwards to the pre-Ford reliability days.
Reply
Zac 3:18PM (3/12/2007)
I don't understand why its possible to buy a company that had over $1 bil. in revenue in 2005 for less than $1 bil. in 2007. No wonder the rich keep getting richer.
While I might agree that it made no sense for Ford to keep both Aston and Jaguar, this is but a drop in the bucket compared to Ford's annual losses.
Finally, why do we keep referring to executives as "good" and "valuable" human capital even when they consistently run their companies into the ground?
Reply
DJ 5:29PM (3/12/2007)
"#15. I don't understand why its possible to buy a company that had over $1 bil. in revenue in 2005 for less than $1 bil. in 2007. No wonder the rich keep getting richer."
First of all, that Billion$ was REVENUE, not PROFIT. AM probably made $80 or $90 million last year, which might look like a 8% - 9% return. BUT, there were a lot of expenses along the way.
Second, that Billion$ is essentially a down payment. It's going to take hundreds of millions just to keep things running, new product development going, updating factories, etc.
Finally, it's a gamble and a BIG ONE. Sure AM is hot right now, but they weren't always and may not be in three years. AlGore may ban the sale of these cars in the US someday, you just never know.....
Reply
Bryan 4:00PM (3/12/2007)
Wow I just went to the Ford website, and Aston is already gone! Didn't take long. I am sad to see it go, but at least they retained a stake in it, and found someone who will do good for it like Ford did. Its a win win situation I guess, Ford makes money on the deal, and keeps a stake in the company that will surely be profitable. Now Ford has one less division to concentrate on. I still think they should have kept it, but you got to do what you got to do!
Reply
beanspants 4:09PM (3/12/2007)
It was a firesale Zac. Ford needs the money badly.
And your comments about the deservedness of bonuses (boni?) vs their worthiness are spot on.
Reply
testa di cazzo 4:24PM (3/12/2007)
"15. I don't understand why its possible to buy a company that had over $1 bil. in revenue in 2005 for less than $1 bil. in 2007. No wonder the rich keep getting richer."
because revenues are completely irrelevant to a company's worth. There are companies with billions of dollars in revenues (Chrysler) which are worth a damn cent. the most important thing when valuating a company is its profits (Earnings Before Interest and Taxes). That's how you judge an investment. So though Aston may have had over $1 billion in revenues in 2005, i can guarantee you that it had under $100 million in profits. By that estimate, Ford made off like crooks, because a typical valuation for a company is 6-8 times EBIT, which would value aston at 600-800 million USD...
Reply
Spectacular Bid 4:47PM (3/12/2007)
#15. QUOTE: "I don't understand why its possible to buy a company that had over $1 bil. in revenue in 2005 for less than $1 bil. in 2007. No wonder the rich keep getting richer."
What is hard to grasp? Sales do NOT equal profits. So what if any company has even $10 billion in sales but makes just a 1% profit margin. That means $100 million in earnings and perspective buyer might only pay 5 or 6 times that value.
Automotive companies are not valued upon sales. Look at General Motors - the company is worth under $20 billion US today, but had sales of just over $200 billion in 2006.
Aston Martin in 1992 made just 46 cars. That's forty six. Times are great now to be sure. But the luxury sports car market doesn't last forever. Ask Porsche Cars about the crash after the bumper 1980s.
I think the price for AM north of $800 million was insane myself. Ford made out like a bandit with the investment.
Reply