Depa, the Dubai interiors contractor, has acquired the German superyacht and private jet outfitting specialist Loher Raumexklusiv in the hope of capitalising on an increase in orders from multimillionaires in the developing world.
Depa looks to the new millionaires
Depa has acquired the German superyacht and private jet outfitting specialist Loher Raumexklusiv in the hope of capitalising on an increase in orders from multimillionaires in the developing world.
The world's largest interiors contractor bought the German outfit through Depa's wholly-owned German yachts-business subsidiary, Vedder. Loher builds furniture for superyachts, aircraft and homes.
"Depa's yachts business has been a strong and consistent revenue generator. The yacht-building market continues to perform well and this acquisition will increase our already strong market share and allow us to derive significant business efficiencies as we incorporate the assets under Vedder's brand," said Mohannad Sweid, the chief executive of Depa.
"The market for luxury aircraft interiors has grown exponentially over the last few years, driven predominately by Asia and Africa, and by combining our range of capabilities and services we see this as an attractive market with genuine long-term prospects and opportunities," he added.
In May, the 82-year-old Munich-based Loher said it was facing bankruptcy proceedings if a buyer could not be found for the group by June.
Depa's move not only saves the 230-employee strong company from wrapping up its operations but also provides the Dubai-based firm with its first entry into the niche private jet interiors market, which the company described as a "natural business expansion".
Depa, which is 24 per cent owned by Dubai's largest contractor Arabtec, declined to comment on how much it had paid to acquire Loher.
It said the deal included the company's order book, employees and 15,000 square-metre factory as well as its machinery. Depa added that Loher's clients included Lufthansa Technik, EADS Sogerma and various private jet companies.
Vedder, which Depa acquired in 2008, had recently taken Dh235 million of new orders.
Depa, which was hit hard by the Dubai property crash, has been looking to diversify away from its core market.
According to research from the American market research firm Frost & Sullivan, the commercial aircraft cabin interiors market is set to grow at a rate of about 8.7 per cent a year, as there has been unprecedented growth in the number of new aircraft coming on stream. It added that at the same time the market for retrofitting aircraft cabins would grow at an annual rate of 5.8 per cent.
In March, Depa reported a Dh119.6m loss that it blamed on a legal row surrounding its work with the German contractor Lindner on the delayed new Doha airport.
Over recent months Depa has itself become the focus of merger speculation after Arabtec's chief executive Abdullah Ismaik and the Drake & Scull chief executive Khaldoun Tabari were among new directors appointed at the firm.