Industri Kapital sells Gardena for €730m

Industri Kapital, a mid-market European private equity house, will sell Gardena, a European gardening tools manufacturer, to Husqvarna, a petrol-powered garden equipment producer, for €730 million ($963 million). The purchase price includes the transfer of debt, shareholder credits and pensions amounting to €416 million.  Industri Kapital made 2.5 times its original investment in the business, including the recapitalisation, according to Detlef Dinsel, a senior partner at the firm.

Gardena:will generate a 2.5 times return for Industri Kapital

Gardena has its headquarters in Germany and has reported record results for 2005 to 2006.  In the last year earnings before interest, tax, depreciation and amortisation have risen by 12.6 percent to €77.0 million.  

JP Morgan and Citigroup gave financial advice to Industri Kapital while Ernst & Young and McKinsey & Mercer carried out vendor due diligence.  Hengeler Müller, a German-based advisory firm, were Industri Kapital’s lawyers.

Industri Kapital’s other current German investments are Minimax, a European fire protection systems company; Sport Group, an outdoors sports equipment business, and DSI, a producer of post-tensioning and steel fastening parts.

Dinsel said: “In German-speaking countries, including Austria and Switzerland, the mid-cap market is very active.  We will make a minimum of one investment next year and would possibly exit one portfolio company.”

Industri Kapital has completed seven exits over last 12 months, including VSM Group, a sewing machine manufacturer, which it sold to US private equity firm Kohlberg & Company, a US private equity firm, in December 2005, and Enermet Group, an energy metering equipment supplier, to Bayard Group for €90 million.

Last week Industri Kapital sold Consolis, a European concrete company, to private equity fund LBO France, making three times its money after a buy-and-build in 2005.

Industri Kapital manages almost €4 billion in fund commitments and is understood to be launching a fund early next year with a target of more than €1 billion.