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Author Topic: Silver Fleet Capital Invests in PhaseOne  (Read 23451 times)

Brian Hirschfeld

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Silver Fleet Capital Invests in PhaseOne
« on: February 18, 2014, 09:58:12 am »

Interesting little piece of news that was brought to my attention over here. Certainly seems like PhaseOne has been stepping things up especially over the past few years. I'm not sure what exactly PhaseOne will do with this influx of capital, my theory is some form of vertical integration to maximize profit and efficiency, PhaseOne has seen some nice growth over the past couple of years (you can look up their public filings through the references on their Wikipedia page), so it will be interesting to see what they do with this nice windfall.

Personally I could envision the acquisition of Schneider-Kreuznach, or at least this is one possible use of the investment that I might personally like to see because it could lead to more / better lenses becoming available. But I don't know if this is financially viable since I don't know anything about the size / scale of Schneider as a company.

Any thoughts out there?

http://www.growthbusiness.co.uk/news-and-market-deals/mergers-and-acquisitions/2454317/silverfleet-capital-snaps-up-stake-in-nordic-camera-business-phase-one.thtml

Best,
BH
« Last Edit: February 19, 2014, 07:59:12 pm by Brian Hirschfeld »
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Rob C

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #1 on: February 18, 2014, 10:08:40 am »

And so you lose ever more autonomy and control.

In the end, as with so much in life, if the thing doesn't work one way then doing the same thing under a different umbrella changes little - it still doesn't work out. I am not saying it wouldn't work out long-term as it is - how could I possibly know? - but unless there are real problems, why would you blow autonomy?

I wish 'em well.

Rob C

gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #2 on: February 18, 2014, 10:33:11 am »

Interesting.

This from their blurb -

Quote
Buy and build is about investing in a core platform company, and then backing that business to make one or more acquisitions. These ‘add-ons’ will ideally bring either new customers, new markets or new technologies into the group.

In executing Buy-and-Build strategies, we are effectively acting as a trade buyer, yet a trade buyer with significant speed and execution advantage. Through a Buy-and-Build strategy, our portfolio companies are able to achieve real revenue and cost synergies, as well as other scale benefits, such as increased purchasing power.

In addition to that, I can't imagine Leaf will be carrying on as a separate brand for much longer.

/edit
WRT Schneider, tough to see that one making sense -

http://en.wikipedia.org/wiki/Schneider_Kreuznach

Only a very small proportion of their lenses are relevant to medium format.
« Last Edit: February 18, 2014, 11:07:37 am by gerald.d »
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Doug Peterson

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #3 on: February 18, 2014, 11:08:52 am »

And so you lose ever more autonomy and control.

In the end, as with so much in life, if the thing doesn't work one way then doing the same thing under a different umbrella changes little - it still doesn't work out. I am not saying it wouldn't work out long-term as it is - how could I possibly know? - but unless there are real problems, why would you blow autonomy?


Every investment and every capital firm is different. Sometimes they are done because things are not working; sometimes they are done because things are working well enough to justify aggressive financing of expansion. In this case P1 isn't in a position where "things aren't working out one way". They in fact have been profitable and growing every year since the financial crises.

Let's all put in our calendars to review this thread in about a year shall we :).

Conner999

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #4 on: February 18, 2014, 11:16:36 am »

Yup, with both mainline MFD vendors now with their control stakes taken by private money players, it WILL be VERY interesting to see over the intermmediate term who is operating at what levels - and with what logo over the front door.  
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gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #5 on: February 18, 2014, 11:18:49 am »

Every investment and every capital firm is different. Sometimes they are done because things are not working; sometimes they are done because things are working well enough to justify aggressive financing of expansion. In this case P1 isn't in a position where "things aren't working out one way". They in fact have been profitable and growing every year since the financial crises.

Let's all put in our calendars to review this thread in about a year shall we :).

What odds would you give me on Leaf no longer existing as an ongoing brand when we review the thread in a year's time? :)

With my serious hat on though, perhaps you could share your views (not necessarily from the perspective of a dealer) as to the Phase/Leaf marketing strategy?

There always seem to be exclusive capabilities held back for each brand.

I don't believe for one moment that there are any technological reasons why a single back couldn't be made that delivers the benefits of both.

And with the release of the IQ250, is this not the first time there has been a new generation of technology launched with a Phase One back, but nary a peep out of Leaf?

Is there truly space for both brands to coexist in such a small - and clearly increasingly competitive - market?
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gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #6 on: February 18, 2014, 11:37:33 am »

Been pouring over Silverfleet's past investments.

These guys don't hang around. We can expect to see significant impact from their investment within a 12 month timeframe, and then the business sold off 3-4 years after that.

It's gonna be one hell of a ride :)
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JoeKitchen

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #7 on: February 18, 2014, 11:46:10 am »

It seems that there is a large desire for some Schadenfreude from Phase One, and I don't know why.  Maybe it is because they are the King of the Hill and people like to see an epic fall from grace?  

Insofar as Phase dissolving Leaf, I can't see it ever happening.  Leaf provides Phase with another revenue stream, namely from those who don't want to or can't pay the extra 30% premium for Phase One branded backs.  It is a great example of self cannibalizing that actually works (I think, but then again I don't have the financials to review).  If Phase dissolved Leaf, where would those buyers go?  Some may bight the bullet and buy a Phase back, but I guess most would just stick with Canon, Nikon, etc.  
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gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #8 on: February 18, 2014, 12:03:36 pm »

It seems that there is a large desire for some Schadenfreude from Phase One, and I don't know why.  Maybe it is because they are the King of the Hill and people like to see an epic fall from grace?  

Insofar as Phase dissolving Leaf, I can't see it ever happening.  Leaf provides Phase with another revenue stream, namely from those who don't want to or can't pay the extra 30% premium for Phase One branded backs.  It is a great example of self cannibalizing that actually works (I think, but then again I don't have the financials to review).  If Phase dissolved Leaf, where would those buyers go?  Some may bight the bullet and buy a Phase back, but I guess most would just stick with Canon, Nikon, etc.  
No Schadenfreude from me - just a purely objective perspective on the company, marketing, and how it's structured.

I own one P1 back, and will probably be buying a second within the next month.

The overheads of running the two brands is a clear area for consolidation. Absolutely no reason why Phase One couldn't bring everything under one brand whilst dropping the nearly-overlapping products. Practically every other camera company manages to do it - in fact, it would only strengthen the Phase One brand.

I was wrong about the 250 actually - there's been no Leaf 2-series equivalent at all, has there? The only thing new was the WS Credos, which were announced around the same time as the IQ2's, IIRC?
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torger

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #9 on: February 18, 2014, 12:17:01 pm »

I think Leaf will stay in, but "degraded" to a budget brand, ie the Phase One brand has premium prices and gets the newest technology first, and then the same technology with a bit different gui and some stripped features are provided again in the Leaf brand at a lower price. So customers that think the Phase One brand is too expensive can still buy Phase One products, but under the Leaf brand.
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gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #10 on: February 18, 2014, 12:25:12 pm »

I think Leaf will stay in, but "degraded" to a budget brand, ie the Phase One brand has premium prices and gets the newest technology first, and then the same technology with a bit different gui and some stripped features are provided again in the Leaf brand at a lower price. So customers that think the Phase One brand is too expensive can still buy Phase One products, but under the Leaf brand.
You're describing the status quo.

Look. Canon manage to sell DSLR camera bodies that cost from close to $7K, all the way down to around $500.

It strengthens the Canon brand. People can buy into it at the bottom end when they start out, and gradually over time work their way up. The "halo" effect is enormous. My first Canon was an A1. My first digital Canon was an EOS350. In DSLR land, I now shoot with a 1Dx, having owned 5DII, 7D, and 1D4 in the past.

Can you imagine a situation where the 1Dx was marketed as a Canon, but the Rebel had no Canon branding whatsoever, and was called something completely different? It would make no business sense whatsoever.
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Doug Peterson

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #11 on: February 18, 2014, 12:26:02 pm »

With my serious hat on though, perhaps you could share your views (not necessarily from the perspective of a dealer) as to the Phase/Leaf marketing strategy?
[...]
And with the release of the IQ250, is this not the first time there has been a new generation of technology launched with a Phase One back, but nary a peep out of Leaf?

I rather like the diversity of options the Leaf / Phase duality provides. I hope they don't go away. A Credo 40 is very very similar to an IQ140 with a few features lacking - no hard buttons (useful for gloved operation), no focus mask (useful for iterative focusing on a tech camera and for quick checks during portrait/fashion work), no metadata for horizon/tilt for automatic perspective and horizon correction. Many people are happy to pay for those extra features and can opt for an IQ140. Others are okay without those features and can save some money by going the route of a Credo. The Credo also has separately made color profiles which share lineage/intention with previous Leaf color profiles to provide a different look than P1 and to provide continuity with photographers and institutions that have become accustomed to or otherwise love that look.

The Credo 40 Promo is getting a lot of traction. It serves as a nice market counterpoint to the IQ250 which offers numerous advantages but at a much higher cost of entry.

The two backs share a lot of technology so there is not as much cost of independent development as when there was an Aptus II line which shared little-to-nothing with the P1 line.

The Credo line also supports the Hy6/AFi which is a small but important community to serve.

The IQ launched before the Credo. The IQ2 launched and there is not (yet) any Credo 2 with similar wireless capabilities or the long exposure sensor in the IQ260.

Also remember that for years Phase One offered the P20+, P21+, P25+, P30+, P40+, P45+, P65+ at the same time. So having four IQ2 backs and three Credo backs at the same time is not a large change in distribution methodology.

Manoli

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #12 on: February 18, 2014, 12:30:32 pm »

... but unless there are real problems, why would you blow autonomy?

To raise capital. These are private equity guys.

... sometimes they are done because things are working well enough to justify aggressive financing of expansion ... They in fact have been profitable and growing every year since the financial crises.

Yes, but either not profitable enough or with grandiose/aggressive plans that to date their capital and/or their business model can't support.
In all likelihood not so much ' aggressive financing of expansion' as 'financing of aggressive expansion' .
Or, just perhaps, their CEO is a PhaseOne user ..
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gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #13 on: February 18, 2014, 12:42:22 pm »

I rather like the diversity of options the Leaf / Phase duality provides. I hope they don't go away. A Credo 40 is very very similar to an IQ140 with a few features lacking - no hard buttons (useful for gloved operation), no focus mask (useful for iterative focusing on a tech camera and for quick checks during portrait/fashion work), no metadata for horizon/tilt for automatic perspective and horizon correction. Many people are happy to pay for those extra features and can opt for an IQ140. Others are okay without those features and can save some money by going the route of a Credo. The Credo also has separately made color profiles which share lineage/intention with previous Leaf color profiles to provide a different look than P1 and to provide continuity with photographers and institutions that have become accustomed to or otherwise love that look.

The Credo 40 Promo is getting a lot of traction. It serves as a nice market counterpoint to the IQ250 which offers numerous advantages but at a much higher cost of entry.

The two backs share a lot of technology so there is not as much cost of independent development as when there was an Aptus II line which shared little-to-nothing with the P1 line.

The Credo line also supports the Hy6/AFi which is a small but important community to serve.

The IQ launched before the Credo. The IQ2 launched and there is not (yet) any Credo 2 with similar wireless capabilities or the long exposure sensor in the IQ260.

Also remember that for years Phase One offered the P20+, P21+, P25+, P30+, P40+, P45+, P65+ at the same time. So having four IQ2 backs and three Credo backs at the same time is not a large change in distribution methodology.

Well that was a very hasty edit.

(for those who missed it...

"You see a lot of this throughout the camera industry and other industries. The 6D and 5DIII, the 1Dx vs 1Dc, etc etc. "

was posted and then deleted)

Anyway...

Except it is not four IQ2 backs and three Credos, is it?

Four IQ2 backs, three IQ1 backs, three P+ backs.
Three regular Credos, two WS Credos, seven Aptus.

As to development costs - yes, of course there's a lot of technology sharing.

But there's a lot more to a company's cost base than just R&D.
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Doug Peterson

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #14 on: February 18, 2014, 12:51:59 pm »

Well that was a very hasty edit.

(for those who missed it...

"You see a lot of this throughout the camera industry and other industries. The 6D and 5DIII, the 1Dx vs 1Dc, etc etc. "

was posted and then deleted)

Gerald.d - you don't think it's a bit rude to post what someone has edited out of their post?


Anyway...

Except it is not four IQ2 backs and three Credos, is it?

Four IQ2 backs, three IQ1 backs, three P+ backs.
Three regular Credos, two WS Credos, seven Aptus.

The WS Credos are not separate products; just a Credo minus the IR filter. This is available on any P1 back as well. They are very cool to play with.

The Aptus is on it's way out.

The IQ1 are only available as refurbished and are not being made new.

Anyway... given their recent spat of strong years of financial growth I think their strategy is doing just fine :).
« Last Edit: February 18, 2014, 12:58:52 pm by Doug Peterson »
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gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #15 on: February 18, 2014, 02:15:09 pm »

Gerald.d - you don't think it's a bit rude to post what someone has edited out of their post?
Nope.

Quote
The WS Credos are not separate products; just a Credo minus the IR filter. This is available on any P1 back as well. They are very cool to play with.
Of course they are separate products.
Quote
The Aptus is on it's way out.

The IQ1 are only available as refurbished and are not being made new.
And if Phase One only had a single website to worry about, perhaps it might be up-to-date.
Quote
Anyway... given their recent spat of strong years of financial growth I think their strategy is doing just fine :).
I bet their strategy 3 years ago wasn't to sell a controlling stake in the company.
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JV

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #16 on: February 18, 2014, 02:42:37 pm »

Every investment and every capital firm is different. Sometimes they are done because things are not working; sometimes they are done because things are working well enough to justify aggressive financing of expansion. In this case P1 isn't in a position where "things aren't working out one way". They in fact have been profitable and growing every year since the financial crises.

All capital firms are looking for return on investment though which typically means higher margins.

I would love to be proven wrong but in general the entrance of capital firms is not good news, neither for the customers nor for the employees.

Also talking from my own personal professional experience here unrelated to the photo industry.



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Doug Peterson

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #17 on: February 18, 2014, 02:45:51 pm »

I think if we were at a party and someone said something that no one else heard, and then, for whatever reason, decided didn't want to be heard that it would be frowned upon to then yell out "hey everyone Joe just said _____".

In this case it was of no consequence, just an analogy I thought was not that strong.

I write on the forums in between doing real work, so I don't always triple read my posts and sometimes notice something I want to change and go back and quickly edit. Reposting the edited out section, on purpose, and calling attention to it for the very reason that it was edited out... that's just not good etiquette in my mind.

Probably just easier that I not reply to your questions in the future. I apologize in advance for that.

Doug Peterson

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #18 on: February 18, 2014, 02:47:14 pm »

All capital firms are looking for return on investment though which typically means higher margins.

I would love to be proven wrong but in general the entrance of capital firms is not good news, neither for the customers nor for the employees.

Also talking from my own personal professional experience here unrelated to the photo industry.

You might peruse THIS capital firm's website and former dealings to get an idea of their particular motus operandi.

As I said, not all capital firms are the same.

gerald.d

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Re: Silerfleet Capital Invests in PhaseOne
« Reply #19 on: February 18, 2014, 03:12:29 pm »

I think if we were at a party and someone said something that no one else heard, and then, for whatever reason, decided didn't want to be heard that it would be frowned upon to then yell out "hey everyone Joe just said _____".

In this case it was of no consequence, just an analogy I thought was not that strong.

I write on the forums in between doing real work, so I don't always triple read my posts and sometimes notice something I want to change and go back and quickly edit. Reposting the edited out section, on purpose, and calling attention to it for the very reason that it was edited out... that's just not good etiquette in my mind.

Probably just easier that I not reply to your questions in the future. I apologize in advance for that.

Fine by me.

You wrote it. You posted it. I read it.

I was formulating a reply in my head when I hit the "quote" button.

Wrote the reply.

Hit preview.

And then noticed you'd edited it out.

Presumably because you'd read my post that was written and posted whilst you were writing yours (the forum even warns you about this eventuality.)

Obviously you edited your post as soon as you saw that what you wrote about Canon totally supported my argument.

Personally, I think that if you write something and I see it, I have the right to respond or comment.

And I will continue to do so.
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