Munich-based turnaround specialist Orlando Management and Value Management Services (VMS) in Vienna have realised their investment in Forstinger, an Austrian retailer distributing car parts and accessories.
The two houses have agreed to sell their 100 percent equity interest in Forstinger to pan-European buyout house Bridgepoint Capital in a management-led buyout of the business. Financial details of the transaction have not been disclosed.
The vendors were advised by Freyberg Close Brothers, the corporate finance house.
According to a source close to the deal, the sales process was competitive, with Dutch private equity house Gilde Investment Management among the bidders.
Orlando and VSM bought Forstinger out of receivership ein arly 2002, acquiring a 50 percent equity stake each. Under their ownership, new management was installed, and the business was returned to profitability soon after. In 2003, the company, which by the end of that year employed 900 staff, generated earnings before interest and tax of €6.8 million on revenues of €120 million.
To turn Forstinger around, the two houses refocused the company on core business and restructured its stock keeping system. According to Collin Schmitz-Valckenberg at Orlando, Forstinger’s initial 21,000 stock keeping units were reduced to 7,500 units, and a standardised stock display system was introduced in the company’s 113 Austrian brands, enabling the company to negotiate better terms with suppliers.
Bridgepoint’s investment was led by Anthony Bunker, a senior executive in the firm’s Frankfurt office.
James Murray, a spokesperson in the firm’s London headquarters, said Bridgepoint would aim to further improve Forstinger’s profitability. The company currently has a home market share of approximately 35 percent. Additional growth would come from expanding the business into new markets that are “adjoining to Austria”, Murray added.
Bridgepoint is funding the deal from The Second European Private Equity Fund (EPEF II), the €2 billion buyout fund closed in May 2002. According to Murray, the fund is currently over 60 percent invested.