UK private equity firm Permira is planning to make a further exit from its $1bn 1997 European Fund with the sale of German dental systems business Sirona Dental Systems.
Permira (formerly Schroder Ventures) acquired Sirona from German electronics giant Siemens in 1997 for a reported price of E400m. The investment was the first made from the firm’s Schroder Ventures European Fund which closed on $1bn in June 1997. The transaction included debt underwritten by the then SBC Warburg Dillon Read.
Following the acquisition, the business was separated into two units, Sirona and Demedis, comprising its manufacturing activities and distribution network respectively. Sirona manufactures high-tech dental equipment. The business spans four divisions: treatment centres, imaging systems, dental CAD/CAM Systems and handpieces and sterilisers. Demedis is the leading distributor of dental equipment in Germany and also has a significant presence in Europe's most important dental markets.
In its most recent figures for the financial year 2001/2002, Sirona Group recorded sales of E272m and EBIT of E43m. In the financial year 1998/1999, the first year following the takeover, the business reported sales of E200m and EBIT of E30m. The business, based in Bensheim, employs more than 1,100 people.
At the time of the acquisition, Permira said the plan would be to float Sirona in Frankfurt. However, according to German newspaper Handelsblatt, the decline in the IPO market means the most likely exit for Sirona will come via a secondary sale to another private equity firm. Permira was not available for comment.
Permira has been investing in Germany since 1986, having made more than 50 buyout transactions in the country. So far this year, the firm has completed the purchase of a 49 per cent stake in The Rodenstock Group, the ophthalmic optics business, in addition to the acquisition of a 65 per cent interest in Premiere, the German pay-TV business sold by insolvent media empire Kirch Group.
In 2001, the firm invested in Grammar, a family-owned manufacturer of automotive interior systems, and bought Together for Leather, a leather chemicals business. It also featured in the E2.5bn buyout of Cognis, the specialty chemicals group it bought off Henkel together with Goldman Sachs Capital Partners.
Permira is currently investing its second European buyout fund, capitalised at E3.5bn. It recently launched the campaign for a successor vehicle with a fundraising target of close to E5bn.