VW to sell motorbike brand Ducati (Update)

MotoGP Ducati

UPDATE Audi could be one step closer to selling off Ducati as Bloomberg is reporting the automaker has received interest from several different companies and investment firms.

Citing people familiar with the matter, the publication says CVC Capital Partners and Permira are both considering bids as is Hero MotoCorp. Royal Enfield's parent company, Eicher Motors, is also rumored to be considering an offer.

Sources suggest Audi could move towards formalizing the selling process in the next few weeks but the automaker hasn't decided whether or not to let Ducati go. If the company decides to sell, the Italian motorcycle brand is expected to be valued at more than $1 billion (€892 million).

Audi bought Ducati from Investindustrial in 2012 for approximately $962 (€860) million. The four-ringed brand didn't seem to have much of a plan for the company but Rupert Stadler stated Ducati has "great expertise in high-performance engines and lightweight construction, and is one of the world’s most profitable motorcycle manufacturers."

A lot has happened since Audi purchased Ducati and the elephant in the room is Volkswagen's dieselgate scandal. The company is facing billions in fines as well as recall costs so it's no surprise a Ducati sale has been rumored for nearly two years. Carscoops

04/26/17 Volkswagen Group is considering a possible sale of Ducati as the automaker seeks to streamline operations to fund a strategic overhaul after its emissions-cheating scandal, two people familiar with the matter told Reuters.

VW has tasked investment banking firm Evercore with evaluating possible options including a sale of the Italian motorcycle maker, which its luxury division Audi acquired for about 860 million euros ($935 million) in 2012, the sources said.

VW has started reaching out to potential buyers to sound out their interest but no decision has been taken on whether the firm will be divested, the sources said.

VW referred to Audi for comment. Audi and Evercore declined to comment.

One of the sources said Ducati has annual earnings before interest, taxes, depreciation and amortization (EBITDA) of roughly 100 million euros and could fetch a valuation of 1.5 billion euros, or 15 times its core earnings, a multiple similar to that of Italian supercar maker Ferrari.

A banker close to the industry said potential buyers were likely to offer Volkswagen an earnings multiple of more than 10.

The motorbike group may appeal to peers such as Chinese groups, India's Hero or investors such as the consortium which bought British sports car maker Aston Martin in 2007, the sources said.

Private equity firms could also raise their hand for the brand, whose motorcycles have won the Superbike racing competition 17 times, the sources said.

It remained unclear whether large competitors such as Harley Davidson, Kawasaki or Honda could be interested, they said. autonews