IK strikes gold with 6x Magotteaux exit

IK Investment Partners has booked a substantial return after selling Magotteaux, which refines mined materials into small pieces, for €550m after four years of reshaping the business.

European buyout firm IK Investment Partners has sold Magotteaux to Chilean conglomerate Sigdo Koppers for €550 million, generating a six times return on its investment. IK is understood to have acquired a 55 percent stake in the business for €70 million in 2007. 

Magotteaux provides machinery for crushing, grinding or breaking into small pieces the hard matter found in industries such as mining. 

Under IK’s ownership, the business has undergone various restructuring and enhancement operations. These included changes to the company’s engineering culture, health and safety, reducing costs and improving delivery services. It has also introduced new products and experienced a one-third increase in sales to €500 million and a two-thirds increase in earnings before interest, tax, depreciation and amortisation to €66 million from 2007 to 2011. 

IK said more than €120m had been invested in the company over the last four years, primarily on maintenance projects and capital expenditure to support expansion into emerging markets such as Thailand and India. The company’s headcount has risen by 15 percent, IK said. 

We invested heavily in research and development 

Bart Borms, IK Investment Partners

Bart Borms, deputy director of IK said: “We invested heavily in research and development as well as capacity expansion but also supported a major operational improvement programme. With over 50 percent of production capacity now in high-growth countries, the group is poised for superior growth. We are delighted with the financial returns we have achieved, but are also proud of the successful reshaping of the Group and its positioning for future growth.”

Sigdo Koppers plans to keep Magotteaux as a separate, stand-alone business, the company said.

The chief executive of Sigdo Koppers, Juan Pablo, said in a statement: “It is a superb internationally-oriented company, with high quality management and excellent development perspectives. We plan, with our own resources, to support Magotteaux’s expansion plans.”

BNP Paribas and Allen & Overy advised Sigdo Koppers, with IK advised by Morgan Stanley and Clifford Chance.  

IK recently made its fourth investment this year, acquiring engineering group Doedijns International, taking their €1.7 billion Industri Kapital 2007 Fund to about 70 percent deployed.