Berkshire Buys German Motorcycle Apparel and Accessories Company

The Financial Times reported today that Berkshire Hathaway is acquiring Devlet Louis Motorradvertriebs, a German (Hamburg) based retailer of motorcycle apparel and accessories for about $450 million.  Warren Buffett, looking for investment opportunities in Europe, stated “we have cracked the code in Germany”.

Louis is a family business that will remain a standalone subsidiary of Berkshire, overseen by one of Mr. Buffett’s portfolio managers, Ted Weschler.  Louis has 71 stores in Germany and Austria, and also sells through catalog and e-commerce.  It has gross revenues of $300 million and 1,600 employees.  Therefore, Berkshire is paying 1.5 times sales for this business.

This is Berkshire’s second exposure to the motorcycle business.  In February, 2009 it lent $300 million to Harley Davidson at a 15% interest rate at the peak of the financial crisis.  Harley Davidson repaid this loan in February, 2014.