ALTERNATIVE FINANCING FORMS
FOR ENTREPRENEURS AND INVESTORS

News

Management buy-out: DBAG invests in Karl Eugen Fischer

13. June 2018

Frank­furt am Main — Deut­sche Betei­li­gungs AG (DBAG) is inves­ting in Karl Eugen Fischer GmbH (KEF), the world’s leading company for the deve­lo­p­ment and manu­fac­ture of cutting systems for the tire indus­try. DBAG Fund VII, advi­sed by Deut­sche Betei­li­gungs AG, will acquire the majo­rity of the shares as part of a manage­ment buyout; they will be sold by funds advi­sed by Equi­stone Part­ners Europe. DBAG will initi­ally invest up to €23.5 million for its co-inves­t­­ment. In the target struc­ture, they will in future hold around 20 percent of the shares in the company. Further shares besi­des DBAG Fund VII will be held by the company’s manage­ment. The closing of the purchase agree­ment signed yester­day is sche­du­led for the end of this month. The parties have agreed not to disc­lose the purchase price.

The latest acqui­si­tion marks DBAG Fund VII’s fourth MBO struc­tu­red since the fund’s invest­ment period began in Decem­ber 2016. With a volume of just over one billion euros, it is the largest private equity fund initia­ted and advi­sed by a German private equity company. After four tran­sac­tions, around one third of the invest­ment commit­ments are now committed.

Tire manu­fac­tu­rers use the machi­nes produ­ced by KEF (www.kefischer.de) to assem­ble mainly rubber-coated steel wire and fabric layers (so-called calen­de­red cord mate­rial) for tire carcas­ses and tire belts. These layers form the suppor­ting struc­ture of the tire and give it shape and driving stabi­lity. They are precisely cut with equip­ment from KEF machi­nes. Since the deve­lo­p­ment of the first steel cord cutting line in 1970, a “Fischer line” has become a gene­ric name: Nine of the ten most success­ful tire manu­fac­tu­rers in the world now rely on the company’s machi­nes, whose global market share is around 70 percent. Produc­tion takes place at the company’s head­quar­ters in Burg­kunst­adt (Upper Fran­co­nia), where more than 500 of the total work­force of 545 are employed. There is a sales and service company in both the USA and China. In 2017, 83 million euros were turned over.

Cutting systems are crucial for a smooth produc­tion flow. KEF machi­nes are tech­no­lo­gi­cal leaders in this respect: They are charac­te­ri­zed, for example, by high precision and low mate­rial losses, both important success factors. With a high level of verti­cal inte­gra­tion, KEF ensu­res that the machi­nes adap­ted to the respec­tive custo­mer requi­re­ments can be deli­ve­red in the desi­red quality and on time. The company has been working with its custo­mers for deca­des in the deve­lo­p­ment of the machi­nes and is a prefer­red supplier for quite a few tire manu­fac­tu­rers. Based on its outstan­ding tech­no­lo­gi­cal posi­tion, KEF is expec­ted to bene­fit from the incre­a­sing demand for tires and thus for corre­spon­ding produc­tion faci­li­ties. To this end, invest­ments will be made in expan­ding capa­ci­ties in the coming year, for example with the construc­tion of a further assem­bly shop in Burgkunstadt.

Mecha­ni­cal and plant engi­nee­ring and auto­mo­tive suppliers are two of Deut­sche Betei­li­gungs AG’s four core sectors; in the past ten years alone, DBAG has inves­ted in ten compa­nies from these two sectors. “With our expe­ri­ence and focus on invest­ments in medium-sized compa­nies, we are the ideal part­ner for the company,” commen­ted Dr. Rolf Schef­fels, member of the DBAG Manage­ment Board, on the tran­sac­tion. “We see further poten­tial for Karl Eugen Fischer in view of the tire manu­fac­tu­rers’ invest­ment plans and market deve­lo­p­ments,” Dr. Schef­fels added.

“Our company has bene­fi­ted from the support of private equity funds since the foun­ding family sold the company more than ten years ago — they have suppor­ted our busi­ness,” explains Simone Thies. The commer­cial direc­tor points to the average annual growth of five percent in sales and the number of employees since 2005. He added: “We are sure that with DBAG we will also be able to exploit the oppor­tu­nities that lie not only in market growth, but also in further expan­sion of the service busi­ness in view of the large number of turbi­nes installed.”

Advi­sor DBAG: Gleiss Lutz
DBAG’s compli­ance advice was provi­ded by a Gleiss Lutz team led by Dr. Eike Bicker (lead, part­ner) and inclu­ding the following lawy­ers: Marina Stoklasa, Domingo de Prada, Dr. Chris­toph Skou­pil (all compli­ance, Frank­furt), Dr. Moritz Holm-Hadulla (part­ner), Dr. Domi­nik Braun, Dr. Vanessa Gehle (all anti­trust, Stuttgart).
At Deut­sche Betei­li­gungs AG, Mr. Florian Döring (Gene­ral Coun­sel) advi­sed on the acqui­si­tion and coor­di­na­ted the process.

Gleiss Lutz regu­larly advi­ses DBAG and other inter­na­tio­nal and natio­nal private equity inves­tors on invest­ments in promi­sing compa­nies, inclu­ding in the area of venture capital.

About DBAG
Deut­sche Betei­li­gungs AG is a listed private equity company. We initiate closed-end private equity funds: DBAG funds enable insti­tu­tio­nal inves­tors to invest in the equity or equity-like instru­ments of unlis­ted compa­nies. DBAG advi­ses and mana­ges these funds. In other words, it seeks out, exami­nes and struc­tures oppor­tu­nities for parti­ci­pa­tion. We nego­tiate invest­ment agree­ments, accom­pany the port­fo­lio compa­nies during the invest­ment period and design the dive­st­ment process. We co-invest along­side these DBAG funds with funds from our own balance sheet. A DBAG share thus provi­des access to a port­fo­lio of unlis­ted compa­nies and, at the same time, to a success­ful fund advi­sory business.

Our focus is on medium-sized compa­nies. Their busi­ness models and markets are what we have been dealing with for decades.

Subscribe newsletter

Here you can read about the latest transactions, IPOs, private equity deals and venture capital investments, who has raised a new fund, how Buy & Build activities are going.

Get in touch

Contact us!
fyb [at] fyb.de