Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Abu Dhabi’s Mubadala Capital is buying a majority stake in high-end buggy brand Bugaboo, in a deal valuing the retailer at several hundred million pounds.
Amsterdam-based Bugaboo, which started life in the late 1990s as a prototype for a more versatile stroller — part of co-founder Max Barenbrug’s graduation project — has grown into a business spanning upmarket car seats, travel cots and other infant accessories.
The asset management arm of the Emirati sovereign wealth fund is purchasing a stake from Bain Capital for an undisclosed amount but which valued the brand at “several hundred million” pounds, according to two people familiar with the matter.
Bugaboo gained in popularity after one of its pushchairs featured in an episode of TV series Sex and The City. Its current Donkey 5 Mono carrycot and seat travel system carries a £1,215 price tag.
Antoun Ghanem, executive director and head of Mubadala Capital’s private equity team in Europe, told the Financial Times there was scope for growth in markets such as the US and Asia and the transaction could unlock more deals.
“We believe there’s a lot of organic growth but . . . there are a lot of opportunities. [These] can be smaller bolt-ons, but they can as well be transformative mergers and acquisitions,” he added.
Bain, which bought the pram maker in 2018, had been exploring options for Bugaboo but the process was slowed down by Russia’s full-scale invasion of Ukraine and surging inflation.
Nigel Walder, a partner and head of Bain Capital’s European consumer team, said: “I think [Mubadala] has been looking for a vehicle through which to explore the thesis of consolidation in [the] premium juvenile [market], which is still an incredibly fragmented landscape.”
Walder added: “There are a couple other assets that have tested the markets . . . The benefits of Bugaboo [are that] it is genuinely a global business and it is a business that is not only strollers.”
The transaction, which is subject to regulatory approvals, is the latest development in the global buggy market, which is forecast to grow at an annual rate of 6.25 per cent between 2022 and 2027 — a pace that would push its overall value up by a further $4.3bn, according to Technavio, a research consultancy.
“Over the last five years, we have almost doubled revenues due to both organic growth and the successful acquisition and integration of complementary brands in the worldwide juvenile products market,” said Adriaan Thierry, Bugaboo’s chief executive. “With Mubadala Capital’s support, our brand and product design, our teams, and our business partners are poised for the next phase of our growth and development into new markets.”
Last year, the Financial Times reported that pushchair brand Uppababy was exploring a sale. Stokke, which is owned by South Korean conglomerate NXC, was also considering options including a sale.
The wider pram market has become more fragmented in recent years, with general retailers and online-only players making gains, analysts have said.
Ghanem said Bugaboo, whose management will remain in place, was profitable and Bain would retain a “meaningful minority”.
Citigroup advised Mubadala, while Barclays and Baird advised Bugaboo.