Candover, the London-based European buyout firm, has appointed Kurt Kinzius to set up and grow a German office for the firm in Düsseldorf.
Kinzius is an M&A professional whose most high-profile involvement in German industry to date came in August 2000 when he was appointed a main board director at Mannesman Group with responsibility for corporate development and M&A.
Kinzius took up the position while Mannesman was defending itself against the overtures of Vodafone. He left Mannesman six months into the integration process of the largest hostile takeover in history and 12 years after first joining the group. After Mannesman, Kinzius spent eight months at Einsteinet, a Munich-based application service provider, which he left after eight months to look for a role in private equity.
With 14 M&A transactions to his name, Kinzius will be responsible for originating and transacting deals in German speaking countries, working closely with Jens Tonn, a London-based director who has been with Candover since 1998.
“We’ll have some work to do developing the Candover name in Germany, but there is a strong track record to point to which has been built up since 1980”, said Kinzius. “It’s about giving Candover a German face for German industry. We’re looking to have a team of three or four executives in Düsseldorf by the end of the year to generate deals and then leverage our London infrastructure to execute.” Kinzius joined Candover on May 1 and will spend the next two months in the firm's London office 'to get Candover right first.'
Candover, which has raised E2.3bn towards a new LBO fund and is approaching a final closing, is stepping up its effort in Germany at a time when the market is still widely regarded as a fairly mixed bag for private equity operators. Corporate restructuring is certain to generate significant investment opportunities, but acceptance amongst German industrialists of private equity as a funding tool remains comparatively low and qualified investment professionals are considered thin on the ground. A number of international private equity firms recently had to address personnel-related difficulties including Apax Partners, Alchemy and 3i.
Recent changes to Germany’s fiscal regime and the development of a new takeover code have not sparked the sharp increase of investment activity that some observers had predicted.
What may increase deal flow in the short term are plans recently announced by the German Christian Democrats, currently in opposition and a strong contender in the upcoming September general election, to do away with the tax breaks for asset-selling corporates that were introduced by the incumbent government of Chancellor Schröder. Sellers may be keen to complete disposals prior to this benefit being scrapped.
There are likely to be changes to the make-up of the German private equity scene going forward, but Candover is among the houses that are confident in the prospects facing the market. “We’re certainly bullish about Germany, and we’re looking to spend about half the capital of the new fund in Continental Europe.” The move to Düsseldorf follows Candover’s setting up an office in Paris in October 2001.
Collin Buffin, managing director, said corporate restructuring in industry sectors including manufacturing, engineering, chemicals, media and IT services continued to have a major impact on the German market, adding that Candover was interested in all these industries.
Recent transactions for Candover in German-speaking countries included the SFr580m acquisition of Swissport, the ground handling business, from Swissair Group and the purchase of Vestolit, a PVC producer, from Degussa-Hüls.