MBO: DBAG invests in BTV braun teleCom group
Frankfurt am Main — Deutsche Beteiligungs AG (DBAG) is acquiring a stake in the operating business of BTV braun teleCom AG (BTV), a well-known equipment and service provider in broadband communications. As part of a management buy-out (MBO), the DBAG ECF fund advised by Deutsche Beteiligungs AG will acquire the majority of shares in four operating companies of the BTV group. These will be sold as part of a succession plan by the company founder and shareholder of BTV Thomas Braun, who will continue to be responsible for the management of the companies. DBAG is co-investing up to 4.8 million euros; in future, it will account for around 38 percent of the shares in the companies. Further shares in addition to the DBAG ECF (a total of 93 percent) will be held by the companies’ management. The closing of the purchase agreement is scheduled for July 2018. The relevant antitrust authorities still have to approve the transaction. The parties have agreed not to disclose the purchase price.
The BTV group is DBAG ECF’s fifth majority investment since it expanded its investment spectrum to include MBOs with equity investments of ten to 30 million euros. At the same time, BTV marks the beginning of the second new investment period of the DBAG ECF, or DBAG ECF II. The first investment period of the fund (DBAG ECF I) was thus terminated prematurely after only twelve months. To date, 80 percent of the funds committed to DBAG ECF I have been committed. Further follow-on investments are expected to support the further development of the existing portfolio companies.
BTV (www.brauntelecom.de) is a group of trading and service companies that develop, produce and distribute components for the construction of cable and fiber optic networks. It is one of the few full-service providers on the market: BTV offers everything needed to build, upgrade and operate such infrastructures. This includes, for example, antenna sockets that are individually developed and produced. The Group stocks a wide range of such and other components used by network operators and service companies. A growing service business complements and supports the product business: Certain components in cable networks are becoming increasingly complex and require technical support in planning, sales, configuration and installation.
BTV was founded in Hanover in 1986. Around 40 people are employed there, including in a research and development department: the company develops and tests products in close cooperation with its customers. There are further service and sales locations in Hamburg and in Wismar (35 employees), and subsidiaries are also maintained in the Netherlands and in Taiwan. BTV has grown strongly; in the last three years, revenue almost doubled to around 30 million euros (2017).
BTV is the fifth company in broadband communications in which DBAG has invested since 2013. In addition, there were seven corporate acquisitions of these shareholdings. “The market for these companies is driven by increasing end-customer demand for faster Internet connections, which require existing networks to be upgraded or newly built,” says Torsten Grede, spokesman for DBAG’s Management Board, describing the attractive market environment for this investment. This also includes the trend toward high-performance fiber-optic connections right into the home. “Complexity is increasing — this will continue to drive demand for BTV products and for related services.” BTV’s further development steps are to include not only organic growth but also the broadening of the product and service range through further company acquisitions.
“DBAG has a good reputation and is a very experienced investor in our industry — making it the ideal partner to accompany our company in its further development,” said Thomas Braun, a member of the company’s Management Board and shareholder, explaining the sale to DBAG ECF.
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.