Deutsche Beteiligungs exits tool company after nine years(3)

Engineering company A-Tec Industries has bought Dőrries Scharmann Technologie, a machine tool company, from German buyout firm Deutsche Beteiligungs. Mysterious investor group the Arabic Finance Circle is simultaneously attempting to buy a substantial stake in A-Tec.

Germany’s oldest buyout firm Deutsche Beteiligungs has sold tool machining company Dorries Scharmann Technologie to trade buyer A-Tec Industries for an undisclosed sum.

Dorries Scharmann Technologie’s earnings have grown by an average of 6 percent under the buyout firm’s ownership. The company produces tools for complex machine operations such as vehicle construction, general engineering and aerospace. The business also operates in the energy sector, with strong demand for the equipment it produces for wind turbines.

The German buyout firm acquired the company in 1998 from bankrupt Bremer Vulkan.

Deutsche Beteiligungs’ spokesman said: “The company operates in a cyclical industry and as a subsidiary of an insolvent company it was not in the best shape when we acquired it. We had to invest money to improve the production programme and having ridden out the cycle we have produced a prosperous company.” The buyout firm often has long holding periods because unlike other players it does not avoid cyclical businesses, he said.

Industry specific tools have been a profitable area for buyout firms. Riverside said it made a ten times return this month through the sale of its oil and gas robotics company for an undisclosed sum.
Vienna-listed A-Tec is one of the three companies targeted by the Arabic Finance Circle, a group comprising six unnamed Middle Eastern investors who have announced plans to invest in Germany and Austria. The group announced last Friday it intended to buy a “substantial stake” in A-Tec at €210 ($283) per share, a significant premium over its current share price at €150 per share. 

The group has also announced plans to buy a 20 percent stake in reinsurer Munich Re and in trader Comdirect. The stakes targeted by the group are worth $27 billion. The Arabic Finance Circle’s Austrian-based public relations officer declined to comment.