IK funds sell Arca to Stirling for €190m

Industri Kapital has agreed to sell its entire holding in Arca Systems to Schoeller Wavin Systems, a Dutch business owned by Stirling Square Capital Partners.

Funds advised by Industri Kapital, the Stockholm-headquartered private equity firm, have agreed to sell Arca Systems, a manufacturer of handling products, to Schoeller Wavin Systems, a peer backed by UK-based financial sponsor Stirling Square Capital Partners. Schoeller will pay approximately €190 million for the business.

Proceeds from the sale will go to limited partners in the Industri Kapital 1997 Fund and the Industri Kapital 2000 Fund, respectively. The 1997 fund acquired a 65 percent interest in Arca in 1998, buying it from Perstorp, the specialty chemicals group which at the time retained a 30 percent stake in the company. That stake became part of the 2000 Fund’s portfolio when IK acquired Perstorp in 2001.

According to sources familiar with the funds, IK invested just under €45 million of equity in Arca. Once the disposal closes, the 1997 fund will achieve a 3x money multiple and a gross IRR in excess of 20 percent; the 2000 fund will make 4x cost and a 24 percent IRR. 

Merging Arca with Schoeller will create a company with aggregate annual sales of €520 million and 1750 employees.

Stirling invested in Schoeller in 2003.