NEW YORK—Sotheby’s struck an agreement with Maastricht dealer Robert Noortman to acquire Noortman Master Paintings, a gallery specializing in Old Master, Impressionist and Post-Impressionist paintings, the auction house announced on June 8.
Through the transaction Sotheby’s will take over all the assets of Noortman Master paintings, consisting principally of art inventory, receivables and the gallery premises.
Sotheby’s said it will acquire all of Noortman’s shares in exchange for Sotheby’s shares, with an initial estimate of about $56.5 million, as well as the assumption of approximately $26 million in debt. According to a Sotheby’s filing with the U.S. Securities and Exchange Commission (S.E.C.), the amount owed consists of a $17 million long-term, noninterest-bearing note, payable to Noortman over a period of three years, and $9 million in bank debt.
A spokeswoman for Sotheby’s says its assumption of the debt is “standard in such transactions.” Asked for details, she explains, “Noortman Master Paintings had a line of credit which Robert Noortman used for his own working capital purposes, including acquiring pictures, which is the way many dealers operate.”
Sotheby’s acquisition of Noortman comes two years after rival Christie’s acquired prestigious London dealers Hall & Knight, and appointed Nicholas Hall and Richard Knight as international directors of its Old Master pictures department (ANL, 6/22/04).
The acquisition of Hall & Knight boosted Christie’s sales considerably; in January 2005 the auctioneers’ Old Master sales rose to $25.9 million from $11.6 million the previous year.
Positioned to Be a Prime Player
Over the next five years, if certain performance levels are met, an additional 500,000 Sotheby’s shares will be released from escrow to Noortman. (Sotheby’s said the purchase price is also subject to reduction if certain performance criteria are not met.) With approximately 3.2 percent of Sotheby’s shares, Noortman will become a significant shareholder. Additionally, he will join Sotheby’s international advisory board.
Sotheby’s CEO Bill Ruprecht said the deal “offers significant growth opportunities,” adding that the house also foresees a positive impact on earnings in 2006.
Noortman told ARTnewsletter, “I have been thinking about the long-term future of my company for some time,” adding that he is “ready for new challenges.”
Pointing to Sotheby’s “innovative management team and ability to offer sophisticated financial expertise,” he says he will be able to offer further advantages to his clients “by drawing on Sotheby’s great expertise in art, in business and in financing.”
Noortman will continue buying, selling and advising on various artworks. However, Sotheby’s reports, he will operate independently from its auction business, “yet draw on the resources that this transaction will provide.”
Noortman opened his first gallery in Holland in 1968. He was a founding member of the annual fair now known as TEFAF Maastrict (The European Fine Art Fair).
Sotheby’s stock hit a high near $34 in early May and has been declining in recent weeks. As ARTnewsletter went to press, shares closed at $25.11 in trading on the New York Stock Exchange.