HgCapital buys Rheinmetall unit for €115m

HgCapital, the European private equity firm, has completed the €115 million management buyout of Germany’s Hirschmann Electronics from Rheinmetall.

Hirschmann Electronics has been acquired from Rheinmetall in a €115 million ($147 million) management buyout led by private equity firm HgCapital. The deal, which is subject to regulatory clearance, is expected to complete in March.

Hirschmann is a supplier of electronics equipment, components and related accessories. Its main products include rail-mounted industrial Ethernet and other industrial networking equipment, car antenna electronics, TV transmission equipment and safety systems for mobile plant equipment such as cranes.

The firm supplies state-of-the art bespoke car antenna systems to BMW, Daimler-Chrysler and Audi. It has also recently implemented an Ethernet network in Volkswagen’s Wolfsburg factory – the largest car factory in the world – which is manufacturing the new Golf.

“The transaction marks the final step in the successful divestment of Rheinmetall’s electronics companies, allowing the group to focus on its core automotive and defence businesses and to accelerate the globalisation of both these Rheinmetall sectors,” said Klaus Eberhardt, CEO of Rheinmetall.

Trevor Bayley, who led the deal for HgCapital from its Frankfurt office, said Hirschmann is a “world-class company with a superb product range, an international customer base and excellent prospects”. The deal is HgCapital’s fourth acquisition in Germany in the last 14 months, following investments such as WET Automotive Systems (seat heating systems) and Trados (language translation software).

Debt facilities for the Hirschmann deal were arranged and fully underwritten by NIB Capital and Bank of Ireland. HgCapital was advised by PricewaterhouseCoopers' Corporate Finance and Transaction Services units, Lovells and LEK.

HgCapital has funds under management of €1.1 billion and invests in companies with enterprise values of between €40 million and €400 million. The firm is in the process of raising its MUST 4 European fund, which has a target of €670m.