Cedarlake Capital announced that it has completed the acquisition of controlling equity stake of BMF Group AG, a world’s leading ropeway manufacturer headquartered in Flums, Switzerland. The transaction, with definitive agreement signed in September, is made through one of the managed private equity funds by Cedarlake.
Founded in 1962, BMF Group AG is an internationally leading company in the fields of ropeway systems and amusement park facilities as well as mechanical engineering. With over 50 years of proven track record in planning, designing and realization of complex projects globally, BMF has successfully built up a comprehensive product portfolio, including aerial tramways, detachable gondola and chair lifts, and offers its uniquely designed and engineered solutions to customers in various sectors such as urban/mountain transportation, winter sports facilities, ski resorts and amusement/leisure parks. In recent years, BMF has achieved a rapid expansion beyond its home market and installed its signature product at many of world’s most prestigious locations and tourism destinations, spanning from mountain/ski resorts in Alps to the city landmark in Paris, from passenger trains at Niagara Fall in North America to the world’s tallest Ferris Wheel in the Middle East. BMF has long been widely recognized for the supreme quality and safety of its product and the company has also entered into an exclusive partnership with Porsche Design for its gondola product, one of the many examples of BMF being highly acknowledged by clients and business partners globally.
The acquisition of BMF not only solidifies Cedarlake’s commitment to bringing advanced manufacturing to China, but also shines its recent strategic move into consumer and tourism industry of the world’s second largest economy. With Cedarlake as its new partner and by leveraging the firm’s extensive network and resource, BMF will be well positioned to benefit directly from the long-proven and macro trend of consumption and lifestyle evolution in China, in which the tourism has played a significant role. China tourism industry has seen unprecedented development in recent years and has become a major contributing sector in today’s China economy. According to the China National Tourism Administration, China’s domestic tourism revenue reaches 3.9 trillion yuan in total of over 4.4 billion trips in the year of 2016, representing a 14% and 11% growth from last year, and both numbers are expected to continue the double-digit growth over the next few years. Compared to the rapidly growing demand of tourism service and product, China is still facing the lack of high-quality ropeway systems, especially at ski resorts and professional/leisure winter sports facilities, one of the major key measures used for assessing a country’s tourism infrastructure. Latest statistics from Laurent Vanat’s 2017 International Report on Snow & Mountain Tourism shows that more than one third of ski resorts (36%) and ropeways (39%) are located in the Alps area, representing the highest percentage compared to other regions of the world, where Asia Pacific only accounts for 18% and 13% respectively. In China, there are currently in total 646 ski facilities/resorts with only 226 ropeways installed, according to an unofficial white paper on 2016 China’s Ski Industry issued in early 2017, representing an obvious supply-demand mismatch and unproportionate distribution when taking into the consideration of China’s fast growing skier population and emerging winter sport enthusiasm arising from the upcoming two Winter Olympic games to be held in Pyeongchang, South Korea, and Beijing, China.
BMF already formed a strategic partnership with Beijing North Vehicle Group Corporation (BNVG), a Norinco Group company and one of China’s largest stated-owned companies in this field. Under this partnership, Cedarlake and BMF would join hands with BNVG to establish solid business presence in China’s ropeway market, and aim to achieve further penetration into other Belt and Road Initiative (“BRI”) countries, following the China’s global initiative launched in 2013 which connects 4.5 billion people and 40% of World’s GDP.
The BMF transaction was announced in a year with reduced number of outbound M&A deals, and the market has seen increasing number of targeted investments in companies and assets that will help the country move up the industrial value chain and promote domestic consumer and service sectors, which Cedarlake’s acquisition of BMF could achieve both. Bao Yi, Founder and Chairman of Cedarlake Capital, said: “With BMF newly added to its investment portfolio, Cedarlake Capital is now fully geared up to further tap into BMF affiliated sectors such as sports, tourism and transportation and we will strive to establish an integrated business platform with strategic purpose of improving the living quality of Chinese consumers, an ultimate goal we have long been working on and was repeatedly emphasized by the recently held 19th Party Congress Meeting.”
Cedarlake Capital is a leading investment management firm with strategic focus on China-related and cross-border investments and aspires to create synergies and alliance among global major industries, economies and capital markets. Cedarlake Capital was founded by Mr. Yi Bao, a top deal maker with more than 20 years of experience and track record in investment banking and private equity investments and former Chief Executive Officer of Morgan Stanley Huaxin Securities, Morgan Stanley’s securities platform in China. Cedarlake manages capital for renowned institutional investors, corporations and family offices and currently has a professional investment team with diverse backgrounds, outstanding track record and extensive experience in focused industries as well as deal execution.