Doram In my view, the most likely result of this acquisition is that Breville will gain while everyone else will lose.
Apart from the previous owners/ shareholders who I presume pocket the £100m sale price?
I obviously have no idea what the motivations were for the founders/ owners of Lelit but a number of entrepreneurs/ start ups have the explicit aim of building a company to then be acquired by someone else. They often have this exit strategy from day 1.
Mark-drinks-coffee Apart from the previous owners/ shareholders who I presume pocket the £100m sale price?
I obviously have no idea what the motivations were for the founders/ owners of Lelit but a number of entrepreneurs/ start ups have the explicit aim of building a company to then be acquired by someone else. They often have this exit strategy from day 1.
Yes, of course some people’s strategy is to make an exit, and others can’t resist the temptation. And obviously Lelit’s owners/shareholders will make money as well. That isn’t the point I was trying to make. The point is that the reality today is that there is only room for very few players, who are so strong that no one else can compete (and if anything good tries - they will buy it).
Yes, buying things on amazon is convenient and the prices usually a little cheaper, but this comes at a huge cost to everyone while Jeff Bezos becomes richer and stronger than most countries. As a coffee hobbyist, I don’t see any way to look at Breville buying Lelit as a positive thing.
I am not sure this is the best place for this discussion, and it seems that we will only go round in circles if we continue. I will try to stop. :)
I work in the tech industry and you’re completely correct.
I’ve also been part of the ‘acquired’ company on more than one occasion and I can say with confidence that it very much sucks for everyone who isn’t a shareholder.
This may be a completely useless analogy as we’re talking about coffee machines and not tech companies, but usually the purpose of acquisition is to either buy into a market the parent company isn’t yet in, or to incorporate their products into the parent product.
Again though I hope they just continue to operate as their own entity with the logistic/supply chain support of Breville.
Doram I am not sure this is the best place for this discussion, and it seems that we will only go round in circles if we continue. I will try to stop. :)
Yup I agree, but it was nice to voice (and listen to) different opinions without us calling each other names!
It’s a great discussion and everyone is making points and supporting their views, but also being respectful when disagreeing.
Mark-drinks-coffee Yup I agree, but it was nice to voice (and listen to) different opinions without us calling each other names!
It was nice. We all seem to be able to do this on Coffeetime, realise others may have different opinions to us and be respectful with our own opinions…it’s what makes it such a great forum.
Whatever happens with Lelit, there is a wealth of knowledge on here to enable us to keep our machines in good order for decades. I must remember to get a copy of the V3 Bianca firmware. I suppose I could read it back off my own LCC and save it. All of the components are industry standard, or replaceable with Industry standard components.
A lot of companies have been acquired by corporates over the years…Isomac, Expobar (now Crem), Rocket….it’s just the way of the world. ACS and ECM are still owner companies, but there are very few new entrants into what is a Tough market..ACS was probably the last new proper manufacturer to enter the market.
On that note, are La Marzocco / Mazzer still independent?
Ernie1 On that note, are La Marzocco / Mazzer still independent?
Independent (of the companies many of us use):
Eureka are owned by Nuova Simonelli I (believe)…they used to be Conte Valerio, Rocket, Crem, Isomac, etc.. etc.. all owned by corporates
Not that many owner companies now…
CafeNoir I meant the Bianca one on the LCC.
The Mara X firmware is on the Gicar box and I don’t have the code or equipment to flash those specific boxes. I know it can be done, but I don’t have the equipment and I don’t suppose Lelit will be allowed to send it to me know!
Sadly you may well have to buy a revised Gicar box!
MediumRoastSteam Rancilio are one of the many companies owned by Ali Group, Ceado I think are still owner owned. I believe Astoria own Rocket now
How about Izzo are they independent.
It certainly can be bad news fr a company to be bought out and not all motivations for doing so wok out well for the company tht got bought. One example is when the motivation is to remove competition, and another might be when the thing really being bought is IP.
But in this case, it looks to me that both companies have very strong brands, but in very different markets, and typically appeal to different buyers. It doesn’t make sense to ‘Brevillise’ Lelit - theyd end up with a hybrid that would probably appeal to neither market.
What does make sense is for the muscle of a Breville buying Lelit to build that brand, not to gut it. My guess is that that’s what they’ll do, and then, having that kind of global muscle can be a very good thing.
I hope.
Time will tell.
I would potentially consider it as good. I do think they won’t mess with the brand or Lelit’s innovation / technology value chain. They will do well to keep it separate. Lelit can benefit from Breville’s global reach, resources, capacity to scale; Breville, besides buttressing their top line, can also benefit from Lelit’s know how.
If they want to place Lelit in high street stores, how might Breville-Lelit want to play it?
Another question will be, would Breville keep Lelit’s current after sales business model?
LMSC Another question will be, would Breville keep Lelit’s current after sales business model
That’s exactly my worry. I know most parts are standard parts, but, for instance, on the MaraX and Elizabeth, the “quiet pump” is Lelit’s. The Control Centre and the Gicar box are also made for Lelit by Gicar, but there are other parts too: knobs, steam taps and assemblies, water tanks, which are all made specifically for their machines. Will they be readily available if it breaks?
MediumRoastSteam Exactly. Very ambiguous at this stage. My concern for Lelit as a brand is - what if return to base.
LMSC - I suppose it’s the dream of many small businesses to do a good job, be seems and be acquired or taken over. Many start-ups work with that mentality. The case of Lelit was its recently success. Lelit has been making coffee machines for a while, but its main focus was the Australian market - Lelit wasn’t a very popular in the UK and Europe at all.
Fast forward many years, and the Bianca, MaraX and Elizabeth come to market, and with that global success. They get noticed by a big company and are taken over. Great news for the business and the employees, in some cases: All of a sudden part to a huge organisation: better pay, perks, benefits, bonuses, etc. Better access to funds for R&D, tooling, equipment. However, certain minds of the business might find hard to adapt to become a cog in he machine rather than having decision and executive power. It might be the owners/directors get absorbed into the organisation to run that division. It might be they will take the money and quit and their entrepreneurial mindset kicks in to take part on a new venture.
for the customers…. Time will tell. I hope it’s for the better.
