Cinven buys Ceramtec for €1.5bn

Cinven's investment will allow Ceramtec to pursue growth opportunities in emerging markets, with a particular focus on China, as well as finance the research and development side of the business. The deal is expected to close in Q3 2013.

Cinven also sees room for substantial growth in the US market for the company, which may be achieved through future acquisitions as well as organic growth. Ceramtec also hopes to begin its foray into the knee and shoulder implant markets with the help of Cinven's financing.

Cinven was mainly attracted to the company's strong foothold in the medical technology industry, particularly with its production of components for hip joint prostheses.

The deal was sourced on a quasi-proprietary basis, according tot he GP. Cinven had been tracking the business for 10 years and had therefore formed a relationship with the company's management. Ultimately, however, Ceramtec was acquired by Cinven via an auction process.

The acquisition marks the fourth deal for Cinven's fifth fund, which closed on €5.3bn earlier this month. The fund's three prior investments are Pronet, Prezioso and AMCo, the latter being the combination of portfolio companies Mercury Pharma and Amdipharm, both of which were acquired by Cinven in 2012 for a combined total of £832m.

Debt
A debt package of €1bn has been underwritten for the deal. The facility is understood to have been underwritten by either Deutsche Bank or RBC.

Company
Founded in 1903, Ceramtec is based in Plochingen, Germany. The company employs 3,000 staff and operates 18 facilities internationally.

Ceramtec manufactures advanced ceramics for the medical, automotive, industrial and electronic markets. It offers more than 10,000 products including components for hip joint prostheses as well as cutting tools and ballistic ceramics for armour.

The company recorded revenues of €425m in 2012, as well as an EBITDA of approximately €131m ($175m).

People
Ulf Zimmerman is the CEO of Ceramtec, while Seifi Ghasemi is the chairman and CEO of Rockwood. Principal Pontus Pettersson and Bruno Schick, partner and co-head of Cinven's German team, represented Cinven on the deal.

Advisers
Equity – Deutsche Bank, Berthold Fuerst, Henning Wagner (Corporate finance); Ernst & Young, Michael Vogel, Sachin Date (Financial due diligence, tax); Marsh, Kashif Chaudry (Risk due diligence, insurance due diligence); ERM, Christopher Kiermayr (Environmental due diligence); LEK, John Goddard, Florian Funke (Commercial due diligence); Trumont International, Komail Thaver, Anthony Cox, Walt Dollman (Commercial due diligence).
Vendor – Lazard (Financial due diligence); Willkie Farr & Gallagher (Legal).

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• Topics
• DACH
• Buyouts
• Industrials
• Cinven
• Germany