Doughty Hanson to buy Svendborg Brakes for €460m

The European buyout firm is making its second bet on renewable energy, banking on the growth in the global wind turbine market to drive sales at Svendborg. Doughty Hanson has an existing investment in LM Glasfiber, a wind turbine blade maker, which despite some lean years is now enjoying strong growth.

Doughty Hanson, a European private equity firm, is to acquire Svendborg Brakes, a global provider of industrial brake systems, for a total consideration of €460 million ($725 million). Doughty Hanson is purchasing 100 percent of the Danish business. No other financial details were disclosed.

Svendborg Brakes is a worldwide provider of brakes to the wind, mining, crane and offshore oil industries.  The company currently supplies many of the world’s largest wind turbine manufacturers in Europe, the US and Asia, where it established a new facility in China in 2007. 

The wind turbine industry is growing globally, driven by a combination of rising demand for renewable energy, increased public awareness of climate change, and political agendas aimed at decreasing dependency on oil. It is estimated that demand for wind energy will increase at a rate of around 20 to 25 percent a year until 2020. 

Doughty already owns LM Glasfiber, a supplier of blades for wind turbines, which it has had in its portfolio since 2001.

Jan Amethier, a senior principal who heads Doughty Hanson’s private equity activities in the Nordic region, said in a statement:  “Wind energy is one of the fastest developing sectors in the alternative energy space and is expected to see unprecedented growth globally in the coming years.  In line with this, Svendborg Brakes has achieved a phenomenal increase in revenues in the past few years, more than doubling its annual turnover between 2005 and 2007.”

He said Svendborg was well placed to take advantage of continued growth in the renewable energy and other sectors. 

Since Doughty Hanson acquired LM Glasfiber, it has grown from a regionally focused business to a global corporation with revenues in 2007 of close to €600 million and more than 6,000 employees globally.