3 questions to smart minds
Photo: S. Zuschke | BC Partners

The helping hand of the investor

For this 3 questions to S. Zuschke

BC Part­ners
Photo: S. Zuschke | BC Partners
24. Janu­ary 2012

Compa­nies looking for an inves­tor often do not know exactly in which areas a private equity firm can and will provide support as a part­ner. The spec­trum is broad, the private equity firms mostly specia­li­zed. — BC Part­ners is an inter­na­tio­nal private equity firm that focu­ses on large and complex tran­sac­tions. For over 25 years, BC Part­ners has worked with locally estab­lished teams in Europe and North America and has since comple­ted 79 acqui­si­ti­ons with a total volume of €74 billion.

For this 3 ques­ti­ons to Head of Germany at BC Part­ners in Hamburg

1. How can private equity (PE) firms contri­bute to the growth of port­fo­lio companies?

The answer is initi­ally quite simple: We provide the neces­sary funds to enable the compa­nies to grow through acqui­si­ti­ons and invest­ments. It is quite important to plan enough room for growth when finan­cing company acqui­si­ti­ons. At the chemi­cals distri­bu­tor Brenn­tag, for exam­ple, we have inves­ted around 500 million euros in acqui­si­ti­ons within five years. In the case of trans­for­mer manu­fac­tu­rer SGB-SMIT, it was around 80 million euros within three years for the expan­sion of produc­tion capa­ci­ties. Added to this is our stra­te­gic expe­ri­ence in many diffe­rent indus­tries. We advise manage­ment and serve as spar­ring partners.

2. And in which areas can PE compa­nies make the grea­test contri­bu­tion? In your expe­ri­ence, where does the grea­test poten­tial lie?

Acqui­si­ti­ons usually offer the grea­test poten­tial for value enhance­ment. Growth through acqui­si­ti­ons is our core busi­ness, which we master very well and which distin­gu­is­hes us from most of our compe­ti­tors. We know from deca­des of expe­ri­ence how to struc­ture and finance acqui­si­ti­ons. One exam­ple is the labo­ra­tory service provider synlab which we have thus deve­lo­ped from a medium-sized German company into Europe’s leading labo­ra­tory group. Howe­ver, it is not just about current growth, but above all about future pros­pects. A poten­tial buyer never invests in history, but buys the future. In this respect, in ever­y­thing we do, we not only have the success of the company in mind, but also always a successful exit.

3. As is well known, not all port­fo­lio compa­nies deve­lop as desi­red and posi­tively. How can it be that compa­nies in which you have inves­ted fall into disre­pair despite your due dili­gence, your contri­bu­tion and all your efforts?

It happens, and it’s almost never due to the numbers… The value of a company, its market poten­tial and the indus­try situa­tion can be asses­sed objec­tively. We are very expe­ri­en­ced in this… What you can never check one hundred percent in advance is the human factor.

Is the entire manage­ment team commit­ted to the company’s success? Does every mana­ger bring the neces­sary profes­sio­nal and perso­nal quality, commit­ment, entre­pre­neu­rial thin­king and dedi­ca­tion? If we find that there are weak­ne­s­ses here among indi­vi­du­als in the manage­ment team, we some­ti­mes cannot avoid a manage­ment change. In our expe­ri­ence, things often improve very quickly because the others in the manage­ment team flou­rish and make the most of their newfound freedom.

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