Convince entrepreneurs who have not yet cooperated with private equity investors
Such “primaries” — i.e. primary transactions in which an investor takes a stake in a company for the first time — require good intuition, a network built up over many decades with deep knowledge of the respective industry and, not least, patience and meticulous work. Montagu has its own team for this purpose, which often spends years in discussion with the owners of a company or division before the decision to invest or sell is made. In each of our target industries, we know the few truly top companies and maintain contact with them so that when one of them “hits the market,” we can quickly submit an adequate offer. Above all, this means that, based on our knowledge of the company and the sector, we can also immediately present a convincing investment thesis and a viable concept of how we intend to successfully develop the company in the years that follow.
Founders and owners who run their companies themselves are naturally concerned that their life’s work should be in good hands and that their employees should have successful prospects. But corporate groups also attach great importance to the positive further development of spun-off units. We have been addressing this concern for many years with our carve-out expertise: since 2002, we have carried out 28 such transactions and, as a result, have again significantly expanded our expertise in this field in recent years.
We like technology-based and “indispensable” business models, such as providers of services or outsourced processes that are essential for the successful business operations of their customers. That’s a very broad spectrum. For example, until recently we were involved in a service provider for billing medical services to payers in Germany. RTI Surgical is one of the world’s leading surgical implant companies, offering physicians and their patients a broad portfolio of biological solutions as well as implants made of synthetic materials.
Or take Arkopharma, a company we acquired from family ownership in 2014. We sold the French market leader for natural medicines to the German Dermapharm Group just a few weeks ago. The use of technology is another very important aspect. Our portfolio includes examples such as Nemera’s networked medication dispensing systems, smart surgical instruments at Intech Medical, and Maincare, a software provider for electronic patient records.
We help them to develop a strategic business plan for further growth, but also to implement it operationally. In our experience, there are seven key levers for growth: sales optimization, investment in new products and services, geographic expansion, technologization and digitization, optimization of operating processes, the acquisition of competitors or market players with complementary businesses, and carve-outs. We have extensive expertise and experience in all of these fields. Working closely with the respective management teams, who contribute their industry experience and vision for the company’s future, we support the companies through experts and our network, among other things. Carve-outs, i.e. the spin-off of a business unit into an independent company, are a particularly interesting case. If such a division suddenly receives full attention, is no longer in competition with other business units for resources, and has an independent, motivated management, it often opens up completely different potential than within a corporate structure. Universal Investment is a vivid example of this. As part of two banking houses, this was a successful and profitable business. But since its acquisition by Montagu, Universal Investment has become the absolute market leader for fund administration and asset management services for funds in Germany and Luxembourg, growing by around 15 percent every year.
About Daniel Fischer
Daniel is a member of the investment team based in Frankfurt and responsible for the DACH region. He joined Montagu in 2013 after working for 6 years at 3i in Frankfurt and London. Prior to that, he worked at Clayton, Dubilier & Rice and Morgan Stanley. Daniel holds a master’s degree in business administration from the University of Frankfurt and an MBA from the University of Iowa.