Martin Gruschka‘s growing Swiss private equity firm Springwater Capital agreed to acquire a 51% stake in Pullmantur and Croisières de France (CDF) from Miami-based Royal Caribbean Cruises Ltd. (NYSE: RCL).

As part of the deal, Springwater and RCL are forming a joint venture to bring best-in-class cruise experiences tailored to Spanish and French tourists through the Pullmantur and CDF cruise brands.

RCL will keep a 49% stake, and retain full ownership of the ships and planes currently operated by Pullmantur and CDF, which will be leased into the joint venture. RCL will also provide marine operations services to Pullmantur and CDF through a management agreement.

The joint venture expands on a pre-existing partnership between RCL and Springwater for Wamos, the air transport, travel agency, and tour operation businesses previously known as Pullmantur Air, Pullmantour Circuitos Turísticos, City Tours, Tour Operación, and Nautalia Viajes. Springwater Capital acquired control of the group in September 2014, with RCL retaining a minority stake in Nautalia Viajes and Pullmantur Air.

The investment also expands Springwater’s existing tourism portfolio, which includes airline and travel agency investments in Spain, France and Portugal.

“Pullmantur and CDF have a long history of offering authentic, localized cruise vacations to their home markets,” said Richard D. Fain, chairman and CEO of Royal Caribbean. “We look forward to the new focus that this joint venture with Springwater will bring to these companies as they seek to grow.”

“We are delighted to announce the joint venture with Royal Caribbean, and look forward to working with Pullmantur and CDF employees,’ said Martin Gruschka, founding partner, chairman and CEO of Springwater. “The transaction leverages our firm’s travel sector expertise, and will take advantage of Pullmantur and CDF’s strong client and travel industry relationships in the Spanish and French markets. These relationships – paired with Royal Caribbean’s cruise management – will create the foundation for a successful, long-term strategic partnership.”

The joint venture is expected to be completed later this year, subject to customary closing conditions and regulatory approvals. It is expected to result in an immaterial one-time gain, which will be excluded from RCL’s key metrics.

Pullmantur Cruises (Cruceros Pullmantur), headquartered in Madrid, is the largest Spain-based cruise line. It began operations in the late 1990s as an offshoot of the Madrid-based travel agency Pullmantur. Pullmantur Cruises, through its parent company, was purchased by Royal Caribbean Cruises in 2006. Following the acquisition by Royal Caribbean several transfers were carried out between the Pullmantur fleet and those of other Royal Caribbean brands.

CDF Croisières de France is a subsidiary of Pullmantur Cruises, catering to the French cruise market, with French as the primary language used on board. It was founded in September 2007 as a subsidiary of RCL.

Pullmantur Cruceros. Breezes of the Med

Pullmantur Cruceros. Breezes of the Med, Mare Nostrum Magic on a Cruise

Royal Caribbean Cruises Ltd. is a global cruise vacation company that owns Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisières de France, as well as TUI Cruises (a brand aimed at a German-speaking audience) through a 50 percent joint venture with Germany’s TUI AG. Together, these six brands operate a combined total of 46 ships with an additional ten on order. They operate diverse itineraries around the world that call on approximately 490 destinations on all seven continents. The company was founded in 1997 when Royal Caribbean international, founded in 1968, merged with Celebrity Cruises, founded in 1988. RCL is the world’s second-largest cruise line operator, after Carnival Corporation & plc. As of May 12, 2016 RCL had a market capitalization of $16.3 billion.

Springwater Capital LLC is an independent private investment firm founded in 2002. The company invests in different sectors throughout Europe always working closely with its portfolio companies’ management in order to achieve long-term sustainable returns.

The secretive firm specializes in reorganization, restructuring, acquisition, special situations, and special opportunities transactions like turnaround and distressed investments. The firm seeks to invest in the media, real estate and entertainment sector, preferably in Europe.

Springwater makes non-operational control investments. A control position is not needed in case of special opportunity investments, but an influential role is required in order to actively co-drive the restructuring process. It typically invests in debt and equity.

Springwater Capital was founded in 2002 and is based in Geneva, Switzerland with additional offices in London, UK; Luxembourg; Madrid, Spain; and New York, N.Y. The firm has performed over 30 acquisitions and its current portfolio includes more than 20 platform companies with about €3bn in sales. In Spain Springwater has invested in companies such as Wamos, Aernnova, Delion, Daorje, Nervión Industries (Monesa), Fivemasa, Ceyde, Think Textil, Imtech, Peggy Sue’s or SGEL. In the tourism sector, Springwater has presence through affiliated companies in several countries such as Spain, Portugal, Italy, France and selected locations in Africa.

Springwater does not seek to know the operational aspects of its portfolio companies in depth, it says, and presumably it does not need to know.  The firm manages the numbers, strategies and human resources of its portfolio companies in five major areas as diverse as renewable energy, engineering, tourism, engineering, and business processes and outsourcing.

Springwater’s founder and brash private equity dealmaker Martin Gruschka seems to have an eye for this line of business.

“Sometimes it’s an advantage not know the business, because you neither know the vices nor the processes,” Gruschka recently told Spain’s Economia Digital. “Although it isn’t always the best solution, it’s not necessarily bad for a fresh person to come in, who doesn’t know the sector.”

Photo: Martin Gruschka, Founding Partner, Chairman and CEO of Springwater Capital LLC.

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