Dainese bought for 1 Euro

[Hot_Air]

It may be old news to you, but this was new to me: Dainese has been bought for 1 Euro. Another sad tale of Private Equity owners ruining a company for their own gain

The well-known motorcycle clothing brand Dainese was sold for the symbolic price of €1 (approx. US$1.10) to London-based investment funds Arcmont Asset Management and HPS Investment Partners – recently part of BlackRock – after experiencing significant financial difficulties. The buyers were already the company’s main creditors and took over Dainese with the aim of restructuring its debts of around 300 million euros (approximately 330 million US dollars).

Like many, I went from being a relatively repeat Dainese customer to stopping buying the Italian brand because quality declined. While Dainese was never cheap, today's prices are eye-watering, yet forums are filled with increasing reports of quality problems. That's an excellent way to lose loyal customers.

[Horse]

its debts of around 300 million euros (approximately 330 million US dollars).

.... loyal customers.

So, in very simple terms: if they'd sold a million suits, they lost €300 on each?

[Hot_Air]

Dainese may make a profit on its products, but not enough to service its debts—the very debts taken out by a Private Equity firm to buy Dainese in the first place!

As far as I understand it, the Private Equity firm funded its acquisition of Dainese via increasing Dainese’s debt. That’s the whacky world of corporate finance: you can buy a company via the company’s debt. This is the Senior Note that the Motorcycles News article refers to.

Subsequently, the Private Equity company sold Dainese to two debt management companies for 1 Euro. The Italian company is now owned by its moneylenders (whose expertise is in debt management, not managing a motorcycle clothing company).

However, I’m happy to be corrected if I’ve misunderstood the Senior Debt situation. I’m not a corporate financier!

[Dickyboy]

Dainese may make a profit on its products, but not enough to service its debts—the very debts taken out by a Private Equity firm to buy Dainese in the first place!

Seems to be the way of the world these days, buy company saddle it with debts at large % or pay excessive dividends until you've milked it dry (aka paid yourself back many times) then offload for peanuts

[Yorick]

When I was younger I could never really afford Dainese or Arai gear and maybe inside I was a little envious.

When I got my first contract I.T. job my accountant let me buy a bike on company money. He then told me to go buy proper bike kit,

I remember walking into Carnell's like a kiddy in a sweet shop

Full Dainese suit, Doohan Arai lid and Alpinestar Doohan boots. It felt fantastic to have no money worries anymore.

I've carried on buying only those 3 brands, well, just because I can and it makes me feel good wearing them.


And have also tested them all thoroughly on the track

[Horse]

And have also tested them all thoroughly on the track

Don't worry, mate, I can arrange training for you

[Hot_Air]

Full Dainese suit, Doohan Arai lid and Alpinestar Doohan boots. It felt fantastic to have no money worries anymore.

I've carried on buying only those 3 brands, well, just because I can and it makes me feel good wearing them.

I, too, had to start with much more affordable brands. And I may return to them, given how expensive gear is becoming.

I wonder what Astars is like nowadays. My old Alpinestars boots have lasted for aeons. But I see increasing comments about a decline in quality for their newer gear—though their QC for gloves has always been behind Held and Five.

[Taipan]

A good few years back their d-dry trousers were, imo, the best winter trouser out there. Then they changed something, and they no longer were, shame. Bean counters making cutbacks on production methods I imagine...