IK acquires Ellab in first IK VIII Fund buyout

The deal sees IK tap its yet-to-be-announced eighth mid-market fund, IK VIII Fund. The GP is expected to announce a first close on around €1.3bn in the near future.

IK VIII Fund will be the GP's second 2016-vintage fund, having closed a €277m small-cap vehicle in March. The return to small-cap investing was among the topics  unquote" discussed with CEO Christopher Masek for a recent profile of IK Investment Partners.

According to market sources, the sale of Ellab was run as an auction process with both trade and private equity bidders, though IK would not confirm this was the case. The same sources suggested an EV for Ellab of around DKK 1.2bn before IK emerged as the winning bidder, though given the sweetspot of typical IK investments, the price may be closer to the DKK 800m-1bn range.

An IK spokesperson told unquote" the firm has appointed SEB as lead debt arranger for the buyout.

Ellab's management team, led by CEO Peter Krogh, will stay in place under the company's new owners.

Company
Headquartered in Hillerød, Ellab is a producer of measuring, recording, monitoring and validating information in thermal processing. The products have applications in the food, pharmaceutical and medical industries.

The company was founded in 1947 and sells its products in 65 countries. Ellab employs a staff of 110 and generated revenue of DKK 148m in 2015, with an adjusted EBITDA margin of 39.2%.

People
IK Investment Partners - Alireza Etemad (partner).
Ellab - Peter Krogh (CEO).

Advisers
Equity - Bruun Hjejle (legal); Rothschild & Co (corporate finance).

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