PADI: Sold for $700M
(Since the publication of this article, we’ve done further research on who purchased PADI and you’ll find it here: PADI was sold to Mandarinfish Holding: Who really owns PADI?)
In November of 2016, the current owner, private equity firm Providence Equity, announced it was putting PADI up for sale for $1B. Based on the news published this week, the sale was agreed on at $700M with a group of wealthy families and endowments.
Based on a Dow Jones article, the consortium made the purchase of PADI through an entity named Mandarinfish Holding.
We do not know when will the closing date be (the effective date when the ownership changes hands). On Providence’s website, PADI is still listed as an active investment (updated: this investment is now listed as realized).
It’s a quick flip for Providence who only acquired PADI the year before, in 2015. Usually, you expect private equity firms to hold on to their investments a bit longer. They usually come in with a plan to increase the value of the company (by cutting costs, increasing prices, investing in new products or new markets — or a mix of strategies) and resell it within 5 years at a significantly increased value.
Is PADI a hot potato thrown from one private equity firm to the next? Why was Providence so much in a hurry to sell PADI, they took a 30% discount on the price they evaluated the company to be worth?
The History of PADI’s Ownership
PADI is the Professional Association of Diving Instructors. It was founded in 1966 by John Cronin and Ralph Erickson. Although it has the word “association” in its name, it’s really a for-profit private company.
For many years, John Cronin was the captain of the ship. A few years after John Cronin passed aways, the ownership started flip-flopping.
In 2012, Lincolnshire Management purchased PADI from Seidler Equity Partners and only kept PADI for a short time, re-selling it to Providence in 2015. And Providence put it back for sale right away, in 2016.
We wish the best of luck to the new owners! The dive industry is in decline and needs some strong leadership to adapt it to today’s consumer’s expectations. We hope the new ownership at PADI will do more than “business as usual”. We need creative and strong leadership to get the dive industry back on track! We can’t keep on living in the past and expect to do well.