Deutsche Beteiligungs AG invests in Sjølund A/S
Frankfurt am Main — Deutsche Beteiligungs AG (DBAG) is investing in Sjølund A/S (Sjølund), a manufacturer of aluminum and steel components for the wind power, railroad, construction and engineering industries. In a management buy-out (MBO), DBAG ECF, which is managed by DBAG, will acquire around 51 percent of the shares in Sjølund from the current sole owner and CEO Søren Ravn Jensen.
DBAG will invest up to 4.5 million euros from its balance sheet for its co-investment; in future, it will account for around 21 percent of the shares in Sjølund. The remaining approximately 49 percent of the shares will in future be held by Søren Ravn Jensen, who will continue to serve as CEO of the company, and other members of the management team. The purchase agreement was signed at the end of December and is expected to be completed in January 2018. The parties have agreed not to disclose the purchase price.
Sjølund is the first investment since the start of the first new investment period of the DBAG ECF, or DBAG ECF I, in June 2017. The management buyout is also the second majority investment by the fund, which has also selectively provided funds for MBOs since expanding its investment criteria in 2016. Previously, the DBAG ECF had exclusively invested in companies on a minority basis in order to promote their growth.
Since the previous sole owner and CEO Søren Ravn Jensen joined the company in 1994, Sjølund (www.sjoelund.com) has developed into one of the largest suppliers in the niche market for complex components made of bent aluminum and steel. At the company’s headquarters in Sjølund, Denmark, and at a production site in China, around 110 employees manufacture components that account for only a small proportion of their customers’ material costs, but are nevertheless complex in many cases and often safety-relevant. These components are always manufactured according to the specific requirements of the respective customer and distributed globally — also via a third location in the USA. Sjølund also advises its customers on adapting products to the manufacturing process (“Design for Manufacturing”). In this way, the company has built up stable customer relationships and a strong market position. It generated a good half of its total sales of around 31 million euros in the wind power industry in fiscal year 2016/2017 (September 30), mainly with components for the nacelles of wind turbines. In the rail segment, Sjølund supplies train manufacturers with structural profiles and components for exterior cladding, for example for the front of the railcar, the window frames or the boarding area.
Sjølund’s sales markets, some of which are not very cyclical, are expected to grow significantly in the coming years. Drivers of this development are megatrends such as the use of renewable energies, global population growth and increasing urbanization. On this basis, Sjølund is to continue to grow and expand internationally — organically and through acquisitions: Business with existing customers in growth markets such as China and the USA is to be expanded; components for wind turbines are also to be manufactured at the Chinese production site in the future. German customers currently account for around 35 percent of Sjølund’s sales. Another starting point for the strategic development of the company is the realignment of its sales activities. They are to focus more strongly on the highly profitable mechanical engineering sector.
“Sjølund is active in several growth markets at the same time and has by no means exhausted its potential to serve these markets,” said Dr. Rolf Scheffels (photo), member of DBAG’s Management Board, on the occasion of today’s contract signing. “We see this, in combination with its long-established customer relationships, as the promising basis for the company’s continued positive development — and thus an attractive investment opportunity in one of DBAG’s core sectors.”
“Further internationalization of the business is a prerequisite for Sjølund to reach the next stage of its development,” commented Søren Ravn Jensen, former sole owner and CEO of Sjølund. “We are pleased to have an experienced partner in DBAG at our side who can support us with capital and expertise in this important phase.”
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.