PADI Has a New Owner

PADI, which started as a little nonprofit organization decades ago, has not only been owned by a private equity firm, it's just been sold to another private equity firm. The New York firm Lincolnshire Management announced in August that it had bought PADI Worldwide Corp., based in Rancho Santa Maragarita, CA, from Seidler Equity Partners.

Lincolnshire's managing director Kate Lehman told Buyouts that she and her colleagues liked PADI because of its global presence, and because of Lincolnshire's experience with membership-supported organizations that provide training in the sports and recreation industry. Holdings in the firm's portfolio also include Flight Training Acquisitions, an aviation training company, and The Alaska Club, a chain of fitness clubs in Alaska.

Lincolnshire's two big goals: expand PADI into Asia, and lure younger generations into diving. "Scuba is a steady business, and we see growth coming out of Asia, as well as with 'Generation Y' consumers, or those generally in their 20s and 30s," Lehman said. Lincolnshire will also help build out PADI's social media platform.

Lehman said PADI's performance has remained strong in recent years, despite the Great Recession, but she wouldn't give the details of its financials. Nor is Lincolnshire releasing terms of the deal, though it typically backs companies with revenues between $50 million to $500 million, and operating cash flow of $5 million to $50 million.

Will this deal help PADI improve its dive training standards? It's too soon to tell, but the focus on an expansion into Asia and social media platforms seems to signal that Lincolnshire and PADI have a "bigger is better" focus, and changing the way it currently trains divers is at the bottom of the to-do list.

Peter Meyer, senior vice-president of Willis Recreational Diving Insurance, is not too optimistic that this deal will change anything. "I have always felt that PADI was missing something with respect to its handling of dive training (too simple, too fast), and would expect this sale to simply confirm that attitude going forward. For example, I do not believe that anyone can be an 'Advanced' or 'Master diver, based on current PADI training program outlines - the names just do not support the real ability of those individuals that take these programs - and I think the entire industry already recognizes that. I am involved in some litigation that has PADI training as a focal point, so I can't address that in any further detail, but I can tell you that I think its standards and training are part of the overall problem with the industry."