DBAG acquires 20 percent of Kraft & Bauer Holding

Cate­gory: Private Equity
3. Octo­ber 2018

Frank­furt am Main — Deut­sche Betei­li­gungs AG (DBAG) is inves­t­ing in Kraft & Bauer Holding GmbH (Kraft & Bauer), one of the leading suppli­ers of fire protec­tion systems for machine tools. As part of a manage­ment buyout (MBO), DBAG Fund VII, which is advi­sed by DBAG, will acquire a majo­rity stake in Kraft & Bauer. Previous share­hol­ders are the Swiss finan­cial inves­tor Invi­sion, the foun­ding Bauer family and the current CEO Frank Foddi. DBAG will invest along­side DBAG Fund VII and will in future hold a calcu­la­ted stake of around 20 percent in Kraft & Bauer. The closing of the purchase agree­ment is sche­du­led for the coming quar­ter; the rele­vant anti­trust autho­ri­ties still have to approve the tran­sac­tion. The parties have agreed not to disc­lose the purchase price.

Kraft & Bauer is the fifth MBO of DBAG Fund VII since the start of the fund’s invest­ment period in Decem­ber 2016. This means that around half of the invest­ment commit­ments have now been commit­ted. With a volume of just over one billion euros, DBAG Fund VII is the largest private equity fund initia­ted and advi­sed by a German private equity firm. The current MBO is DBAG’s seventh tran­sac­tion in the 2017/2018 finan­cial year, which ends in a few days (Septem­ber 30). These seven tran­sac­tions involve equity invest­ments by DBAG of around 67 million euros.

Kraft & Bauer ( deve­lops, produ­ces and installs fire protec­tion systems for around 800 diffe­rent types of machine tools. The focus here is on micro­­pro­ces­­sor-control­­led extin­gu­is­hing systems that detect a fire based on sensors and initiate the extin­gu­is­hing process. The fire protec­tion systems are either instal­led directly on the machine by Kraft & Bauer employees or sold as a kit to the machine manu­fac­tu­rer. Kraft & Bauer employs around 80 people at its head­quar­ters in Holz­ger­lin­gen (Baden-Würt­­te­m­­berg), at a plant in Bann­wil (Switz­er­land) and at 13 service loca­ti­ons in Germany, Switz­er­land and Italy. The company gene­ra­tes around 30 percent of its sales in the service business.

Kraft & Bauer’s systems are used in machi­nes with an increased risk of fire, such as milling, turning and grin­ding machi­nes, which operate with parti­cu­larly high precis­ion and speed. Demand for these high-perfor­­mance machi­nes — and thus for corre­spon­ding fire protec­tion systems — is incre­asing. In addi­tion, with a broad instal­led base of more than 30,000 systems in Germany alone, Kraft & Bauer bene­fits from a stable service busi­ness: the fire protec­tion systems need to be inspec­ted and main­tai­ned on a regu­lar basis. Kraft & Bauer’s sales acti­vi­ties are curr­ently focu­sed on the DACH region and Italy. Here, busi­ness with exis­ting custo­mers is to be expan­ded — both on the basis of rising demand and by retro­fit­ting exis­ting systems. In addi­tion, new custo­mers are to be acqui­red and inter­na­tio­nal expan­sion beyond the markets served to date is to be driven forward.

“We are inves­t­ing in a company that has estab­lished a leading posi­tion in its niche market with products that are criti­cal to success and safety,” explai­ned Dr. Rolf Schef­fels, member of DBAG’s Manage­ment Board, at the signing cerem­ony. “Howe­ver, Kraft & Bauer bene­fits not only from its strong market posi­tion, but also from the over­all growing importance of fire protec­tion measu­res for machine tools.”

“We want to exploit the exis­ting market poten­tial and conti­nue to grow,” commen­ted Klaus Bauer, foun­der and member of the Kraft & Bauer manage­ment team. “We are all the more plea­sed to have DBAG, a part­ner with exten­sive expe­ri­ence in mecha­ni­cal engi­nee­ring, at our side in the future.”

“Kraft & Bauer has grown by more than ten percent on average every year since Invi­sion took a stake in the company, constantly streng­thening its excel­lent market posi­tion,” notes Frank Becker, Mana­ging Part­ner of Invi­sion, adding, “This is thanks to the manage­ment team with foun­der Klaus Bauer and Mana­ging Direc­tor Frank Foddi, as well as all Kraft & Bauer employees, whom we would like to thank most since­rely for their successful collaboration.”

About DBAG
Deut­sche Betei­li­gungs AG, a listed company, initia­tes closed-end private equity funds and invests along­side DBAG funds in well-posi­­tio­­ned medium-sized compa­nies with deve­lo­p­ment poten­tial. DBAG focu­ses on indus­trial sectors in which German SMEs are parti­cu­larly strong by inter­na­tio­nal stan­dards. With this expe­ri­ence, know-how and equity, it streng­thens the port­fo­lio compa­nies in imple­men­ting a long-term, value-enhan­cing corpo­rate stra­tegy. The entre­pre­neu­rial invest­ment approach makes DBAG a sought-after invest­ment part­ner in the German-spea­king region. The capi­tal mana­ged and advi­sed by the DBAG Group amounts to appro­xi­m­ately 1.8 billion euros.

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