Sirona Group, the leading global manufacturer of dental equipment for dental practices and laboratories, has been acquired by EQT. The Stockholm-based private equity firm bought the company from fellow financial sponsor Permira.
The deal is subject to bank documentation being signed in around a week’s time, which means that the identity of debt providers and their contribution to the deal has not yet been disclosed. The management team is known to be taking a 15 per cent stake.
Upon completion of the deal, a high yield bond issued by Sirona will be redeemed.
Although the transaction will be funded using senior debt and equity, EQT partner Udo Philipp hinted that the firm’s E160m EQT Mezzanine fund raised earlier in the year will have a role to play in future. “EQT Mezzanine has not invested yet, but our strategy is to grow the business via further acquisitions and we expect EQT Mezzanine to take a share of that,” he said.
Sirona,formerly the dental arm of Siemens, was bought out by Permira for an undisclosed sum in 1997. The business was then split into two companies: Sirona, the industrial division, and Demedis, the dental distribution division. Demedis does not form part of the transaction and will be retained by Permira.
Quoted fund manager Schroder Ventures International Investment Trust (SVIIT) and its affiliated vehicle P123 – which only invests in Permira funds – said its stake in Sirona was valued by the sale at £24m (gross) – an 18 per cent increase on its gross valuation at June 2003 of £20.3m. This resulted in net proceeds of £15.3m after carry and reinvestment in Permira funds.
Permira declined to provide details of its own realisation proceeds.
Sirona’s equipment and technology includes treatment centres, handpieces, imaging systems and dental CAD/CAM systems. In the 2002/03 financial year, the firm posted record sales of E284m, with EBIT up to E52m (from E44m) and operating cash flow up to E71m (from E55m).
EQT has invested from its EQT Northern Europe fund, which closed at E2bn in March 2001. The firm has offices in Stockholm, Copenhagen, Helsinki and Munich and acquires medium-sized companies in Northern Europe.
Permira, which recently closed its E5.1bn Europe III fund, was advised on the sale of Sirona by JP Morgan.