There are multiple reports that indicate Apple, the technology icon, and McLaren Technology Group, the parent organization of McLaren Automotive, are discussing a possible deal. There is no indication as to whether that might be an investment by Apple, or perhaps an acquisition.
These rumors go hand-in-hand with the whispers that have been going around for years that Apple is working on developing cars.
Really, it all makes sense, as earlier this year Apple already invested $1 billion in Didi Chuxing, which is basically the Uber of China. Couple that with the fact that Apple is already closely linked to the development of self-driving car technology, and they've also put one of their long-time, lead hardware engineers, Bob Mansfield, at the head of their car division.
One of the upsides to working with McLaren is that, although the company manufactures world-class, high-caliber automobiles, it's a relatively small company. McLaren only reported $617 million in revenue last year, with only $27 million net profit.
Sources believe that Apple would be able to acquire the company for somewhere between $1.3 billion and $2 billion, which would still be a large step behind Apple's $3 billion acquisition of Beats back in 2014.
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McLaren denied investment rumors to BBC, saying, "We can confirm McLaren is not in discussion with Apple in respect of any potential investment," but conveniently left out the word "acquisition."
It's certainly no done deal yet, but with both The New York Times and The Financial Times confirming the existence of discussions between the two companies, a massive future deal is certainly a possibility.
And Apple could be a potentially perfect home for McLaren. No one would ever deny that McLaren makes incredibly beautiful products, but they have been a little weak in terms of marketing and actual consumer sales. Two things Apple is better at than pretty much every company in the world. Imagine if Apple applied their creative, engineering and marketing teams to McLaren?
It would be an equally attractive deal for Apple. With a McLaren acquisition, Apple could jump straight into the automobile market without having to acquirer a large bulky brand that isn't nearly as cool, such as Buick. Mclaren is also making leaps and bounds into the field of electric cars, something Apple is very much attracted to. In fact, the most attractive aspect of a Mclaren deal to Apple would likely be the car company's technology. With their experience in both Formula 1 racing and building standard consumer cars, McLaren has a wealth of technological patents that Apple would love to own. McLaren's technology has been used to develop systems in the health care, pharmaceutical and oil exploration fields.
How much would McLaren cost? Well, Ferrari is a publicly traded company with a current market cap of $9.5 billion. Ferrari sells around 7600 cars per year to produce revenue of $3.14 billion and net profit of $336 million. McLaren is privately held but in in 2015 the company delivered 1600 cars to produce revenues of $750 million and a net profit of $33 million. So by those numbers, McLaren would cost much less than Ferrari. Let's say McLaren cost $4.5 billion, half of Ferrari's current market cap. Apple currently has $216 billion worth of cash. So I think they can afford it. Even if they have to pay a big premium.
What do you think? Should Apple buy McLaren? Would you be psyched to own a car that was half McLaren half Apple?
