DBAG backs ZGS Bildungs in MBO

The German private equity house bought ZGS from Paragon Partners and Syntegra Capital.

The equity was partly provided via DBAG Fund VI, which now holds a 75% stake in ZGS. Listed DBAG holds a 14.2% stake of the overall 75% stake in the German firm, acquired with €9.8m from its balance sheet. ZGS's management will hold a 25% stake in the company.

The €700m DBAG Fund VI vehicle held its final close in August last year, exceeding its initial target by €50m.

The fresh capital will be used to expand ZGS tutoring services, as well as to enter the adult education and e-learning markets.

Paragon and Syntegra jointly acquired a stake in ZGS from Sylvan Learning Group in 2009.

The investment in ZGS is DBAG's second buyout this year. The firm backed the management buyout of German support services company Formel D in February, securing a 15% stake.

Company
ZGS manages 1,050 company-owned and franchised tutoring centres. The firm operates under the name of Schülerhilfe, providing private tutoring services across Germany and Austria.

Founded in 1974, the firm reports a client base of around 80,000 pupils, with their ages ranging from six to 18.

In 2012, Gelsenkirchen-based ZGS reported revenues of €43m.

People
Dieter Werkhausen is managing director and now shareholder of ZGS. Krischan von Moeller is co-founder of Paragon. Torsten Grede is spokesman of the managemant  board at DABG.

Advisers
Equity - Ernst & Young (Debt advisory, M&A, financial due diligence); Linklaters (Legal; tax); Willis (Risk due diligence); ERM (Environmental due diligence); PwC, mmc Mollenhauer Management Consulting, Konitzer & Tafel (Commercial due diligence); Intralinks (Virtual data provider).
Management - Linklaters (Legal); Ernst & Young (M&A).
Vendor - Ernst & Young (Financial due diligence); Raue (Legal); Robert W. Baird (M&A).

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• Topics
• DACH
• Consumer
• Buyouts
• Germany
• Deutsche Beteiligungs AG