Business World

Saturday 16 December 2017

High-end pram maker Bugaboo up for sale for potential €200m after founders throw family tantrum

Lieke der Kinderen walks her newborn in her Bugaboo stroller in Dordrecht Monday, June 19, 2017. Picture taken June 19, 2017. REUTERS/Michael Kooren
Lieke der Kinderen walks her newborn in her Bugaboo stroller in Dordrecht Monday, June 19, 2017. Picture taken June 19, 2017. REUTERS/Michael Kooren

Toby Sterling

Bugaboo is up for sale in a deal that could fetch €200m following a row between its co-owners, people familiar with the matter said.

The Dutch company transformed the market for high-end baby buggies after one of its prams featured on TV show "Sex and the City".

Long-standing tensions between the company's founders - former brothers-in-law - first became public during a court hearing on March 7.

Businessman Eduard Zanen, who provided seed capital for the company, had become frustrated after co-founder and inventor Max Barenbrug continued to influence strategic direction after agreeing to a design role. Zanen invoked a 2012 agreement that either could trigger the sale of the company to a third party.

Bugaboo brand strollers are displayed in a specialty shop for babies and infants in Paris, France, June 20, 2017. REUTERS/Gonzalo Fuentes
Bugaboo brand strollers are displayed in a specialty shop for babies and infants in Paris, France, June 20, 2017. REUTERS/Gonzalo Fuentes

That disagreement was settled without a ruling, a spokeswoman for the Amsterdam District Court said. But Het Financieele Dagblad first reported on Thursday that the partners have now agreed to a sale. Zanen and Barenbrug's sister divorced a decade earlier, the paper said.

Founded in 1999, Bugaboo's breakthrough came after one of its strollers was shown on in an episode of hit TV series "Sex and The City" in 2002, when the character Miranda had a baby.

The pushchairs, which can cost more than $1,000, have been snapped up by celebrities including Gwynneth Paltrow, Victoria Beckham, and Elton John.

Designers Viktor & Rolf, Bas Kosters and the Andy Warhol Foundation, among others, have crafted limited edition designs, and the company recently made a foray into luggage.

The company made a pretax profit of €16.8m on sales of €95m in 2015, according to its most recent filing with the Dutch Chamber of Commerce.

Jelena Sokolova, analyst at Morningstar, said Bugaboo could be valued against luggage makers Samsonite and Rimowa, recently acquired by LVMH, which both trade at 2 times sales.

Rabobank, which has been given the commission to sell the company, will approach both strategic and private equity buyers for Bugaboo.

"Selling is the wisest decision in a situation like this: when the owners start to fight, that can be the beginning of the end for a lifestyle brand," said Dutch marketing specialist Paul Moers.

Moers noted that while Bugaboo's image of sturdy quality and versatility has spawned many imitators, its reputation is still solid and the market is fragmented.

"It's not too late for Bugaboo, not by any means," he said. "Find a buyer with knowledge of sales and marketing and the power to invest behind advertising and you can grab market share, become a much bigger player."

Competitors and possible buyers for Bugaboo include Britax, owned by Nordic Capital, Stokke, owned by Korean investment firm MXMH, Quinny, owned by Canada's Dorel Industries, Graco, owned by U.S. firm Newell Brands, and LVMH, among others.

Bugaboo has 1,200 employees and models are sold in most developed markets.

Reuters

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