HgCapital has sold German industrial engineering business Schenck Process to Nordic buyout firm Industri Kapital, less than two years after buying it.
Terms of the secondary buyout were not disclosed, but the company has expected revenues of €350 million ($472 million) for 2007. When Hg bought Schenck in November 2005, in a deal that valued the business at €205 million, the company had revenues of €225 million.
Since then Schenck has increased its workforce to 1800 people, and grown both organically and through acquisitions – including a deal to buy coal power business Stock Equipment in June last year.
Schenck is a market leader in the industrial process engineering sector, operating across five different customer segments. Its products are largely used for weighing materials in various industrial environments – which could mean anything from measuring the tiny chemicals involved in plastics manufacturing, to weighing huge locomotives to make sure they are safe for railway tracks.
Hg declined to comment on returns, but its listed investment trust said it had realised £33 million, following an initial investment of £9.3 million – implying a return of 3.5 times capital. The main fund is thought to have enjoyed similar success.
The firm’s industrial team in its German office has had a busy year – it recently bought SLV Group, while earlier this year it completed a two-stage exit from automotive supplier the Hirschmann Group.
This is the sixth deal in Germany for IK, which has a long history of backing industrial investments – the manufacturing, materials and process sectors have accounted for almost half of its deals by volume. Late last year it exited its investment in Gardena, a German garden equipment maker, which it sold to trade player Husqvarna for €730 million.
The acquisition remains subject to regulatory approval in Germany.