DBAG acquires 20 percent of Kraft & Bauer Holding
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 (www.kraft-bauer.com) 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.”
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.