Italian Investment Group to Buy Aston Martin Stake

Italian Investment Group to Buy Aston Martin Stake:

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Aston Martin DBS

MILAN—Italian private equity group InvestIndustrial has agreed to buy a stake in Aston Martin Lagonda Ltd. from its indebted Kuwaiti parent, finance house Investment Dar, in a deal that will bring desperately needed cash to develop new cars for the British luxury brand.

InvestIndustrial said it is paying €190 million ($246.4 million) for a 37.5% stake via a capital increase, giving Aston Martin an enterprise value of about €940 million.

InvestIndustrial, which gained notoriety in April for having sold Italian premium motorcycle maker Ducati Motor Holding SpA to Volkswagen AG’s Audi, beat Indian auto maker Mahindra & Mahindra Ltd. in the bidding for Aston Martin.

Aston Martin, famed for its links with fictional British spy James Bond, is struggling to match its notoriety with financial success in a capital-intensive industry where scale is increasingly important in tapping buoyant demand for top-of-the-range cars in emerging markets.

Other famous British luxury auto brands are owned by big auto-making groups. Bentley is owned by Volkswagen, Europe’s leading auto maker by sales. The Jaguar Land Rover Group is owned by India’s Tata Motors Co. while Rolls-Royce is in the hands of BMW AG, the world’s biggest premium car maker.

As a result of InvestIndustrial’s entrance into the company, Aston Martin will be able to invest more than €625 million in new products during the next five years, the firm said. The deal is subject to antitrust clearance, expected in the first quarter of 2013, it said.

“We are looking forward to working with the management and Investment Dar to achieve a similar transformation and rejuvenation that we achieved with Ducati, by expanding the model range and strengthening the dealership network throughout the world,” Andrea Bonomi, senior principal at InvestIndustrial, said in the statement.

InvestIndustrial had a link with Aston Martin two decades ago when it invested in gearbox engineering firm David Brown, a former owner of Aston Martin, according to the statement.