UPDATED: Onex acquires KraussMaffei
Published: September 26th, 2012
Toronto-based private equity firm Onex Corp. has made another major play in the plastics machinery market, acquiring KraussMaffei AG from Madison Capital Partners for €568 million, with the transaction expected to close by March 31, 2013 pending conditions and regulatory approvals.
Onex acquired extrusion and blowmolding machinery manufacturer Davis-Standard in December 2011, and it sold injection molding and hot runner manufacturer Husky Injection Molding Systems in May 2011. It acquired that firm in 2007.
A potential deal was recently rumored in the German business press and elsewhere, but Imre Szerdahelyi, head of corporate communications and marketing at KraussMaffei, told PlasticsToday that KraussMaffei was never given official notice that it was on the block, although employees suspected the company was being shopped. "The rumors were not important to us," Szerdahelyi said, "we were focused on our operating business." Szerdahelyi was not able to discuss details of the new ownership structure.
Emma Thompson, VP of investor relations at Onex, told PlasticsToday that once the deal is finalized, 93% of KraussMaffei will be owned by Onex, with the remainder split amont management and other parties. Thompson also said the firm's targeting of plastics related companies is no accident. "[Onex] feels like we've found some great businesses within the plastics industry and developed some expertise," Thompson explained, also citing the strong brands and quality management at Davis-Standard, Husky, and KraussMaffei as reasons the businesses were targeted.
Headquartered in Munich and originally founded in 1838, KraussMaffei sells injection molding, extrusion, and polyurethane processing machinery, as well as automation equipment, through the KraussMaffei, Berstorff, and Netstal brands.
The company employs approximately 4000 with manufacturing facilities in Germany, Switzerland, Slovakia, and China. In its last fiscal year ending June 30, 2012, the company reported approximately €1.0 billion in revenue.
Madison Capital Partners, operating as Mannesmann Plastics Machinery Equity, took over the individual plastics machinery companies in the former Mannesmann Group in 2006, including KraussMaffei. The original Mannesmann acquired a majority of Krauss-Maffei AG in 1989, completing its purchase in 1996. The Mannesmann Group was subsequently dissolved in 2000, and two years later, Kohlberg Kravis Roberts and Siemens founded Demag Holding, integrating the plastics machinery producers of the former Mannesmann Group, including KraussMaffei, Berstorff, and Netstal.
Tony Morgan, a Managing Director in Onex's London office, said in a release that KraussMaffei is the first European-based investment for Onex Partners III. That fund, with $4.7 billion, is described by Onex as its "flagship private equity fund."
It will make an equity investment of approximately $340 million, of which Onex's share is about $86 million as a limited partner. Including this transaction and the recently announced acquisition of SGS International, the fund will be approximately 60% invested.