A leading brand
Fairline is one of the world's leading powerboat brands with 37 years standing in the international powerboat market, specialising in the manufacture and distribution of boats in the 34 to 74 foot range. Fairline's premium products are renowned for their style, performance and quality and are sold through an exclusive, independent dealer network in 70 locations worldwide. The company's classic designs have stood the test of time, leading to low depreciation and high resale values. Fairline's sales are truly international with 90% of turnover taking place outside the UK. The company has a loyal customer base which trades up through the size range over time.
Capitalising on the 3i network
In June 2005 Graham Beck, the owner of Fairline Boats, agreed to sell the business to a six-strong management team led by CEO Derek Carter and Finance Director Alan Bowers. 3i was introduced to the opportunity by Carter, who has strong relations with 3i. Carter had also worked on a management buyout of Lewmar Ltd, the marine product manufacturer, several years earlier and was aware of 3i's reputation and track record.
As part of the deal, 3i has appointed David Hoare Chairman of the business. 3i has previous experience of working with Hoare through Target Express, a portfolio company of which he is also Chairman.
Opportunities for growth
The extensive due diligence process identified areas where manufacturing efficiency could be improved and supply chain procurement strengthened. This will enable the company to increase output and improve margins.
The company's business plan also involves a shift in production. Fairline will produce a mix of boats, including larger vessels, which will raise the average price per boat and grow revenue. There are also plans to increase the range of large products offered by building a new manufacturing facility.
Fairline's management will be responsible for implementing these changes with 3i providing support and assistance. A year ago Fairline made two significant management appointments in the manufacturing and supply chain divisions that will implement the agreed business plan in these areas.
An excellent working relationship
Carter is looking forward to working with 3i over the next few years in the lead up to a successful exit. He said: "The team that 3i put together was excellent. They were consummate professionals and completed the deal within the agreed timetable."
Mark Dickinson, Investment Director, 3i, said: "This was a proprietary deal, sourced as a result of 3i's unrivalled network and was executed quickly and efficiently. We will continue to support management's recently introduced Lean Manufacturing and Supply Chain programmes. We also expect to invest further funds in due course to support the building of a new facility to increase the number of product lines that Fairline produces."
*converted at a rate of £1 = €1.429