The auto industry is ripe with investment opportunities for equity firms, says the man who helped orchestrate the purchase of Aston Martin Lagonda Ltd. from Ford Motor Co.
“It's amazing how many people are attracted to automotive,” says Justin Mirro, managing director of Jefferies' Automotive Investment Banking Group, which served as the financial advisor to the consortium of investors that acquired the ultra-luxury auto maker. Price tag: $925 million.
Interest thrives despite potential hurdles such as unprecedented competition and rising material prices, Mirro tells Ward's, suggesting the promise of emerging markets offsets these challenges.
Investors find the auto industry attractive “because it's global, typically fragmented and, for the most part, there's a predictability to it,” he says.
This could explain the growing list of equity groups performing due diligence in response to DaimlerChrysler AG's interest in selling Chrysler Group. Cerberus Capital Management LP has upped the ante by hiring former Chrysler product guru Wolfgang Bernhard as a consultant.
Such a climate could also spur more activity at Ford as analysts continue to suggest the cash-strapped auto maker would be wise to dump Aston's former sister brands Jaguar and Land Rover.
Exclusivity was a cornerstone of Ford's Premier Automotive Group, a stable of luxury marques assembled — largely through acquisitions — in 2000. At the time, PAG consisted of Jaguar, Land Rover, Volvo, Aston Martin and Lincoln.