BHM Group builds on PE strategy, eyes European medtech and renewable energy acquisitions

The firm is interested in acquiring high added-value medical device manufacturing companies, primarily in Europe, with strong research and development and expansion potential, he said.

It is particularly targeting the DACH and central Europe regions, Cerny said.

Potential targets must have their own products as BHM Group’s strategy is to invest in expanding their product portfolio and attacking new markets, he added.

BHM Group is targeting small and medium-sized players with ticket sizes ranging from EUR 10m to EUR 100m in its own equity, together with leverage, Cerny said.

The group is currently seriously looking at five medtech targets and expects to make one or two further medtech acquisitions in Germany and another European market in 4Q 2023 or 1Q 2024, he said.

It has hundreds of millions of euros available to invest, of which around EUR 100m-EUR 200m could be invested into medtech, Cerny said, adding that the group takes an opportunistic approach and does not have a set allocation.

It manages around EUR 600m of its own equity, he said.

Medtech focus
BHM MedTech Group, its medtech subsidiary that is also part of its PE activities, comprises six companies in Germany, Poland and the Czech Republic. This group has combined annual revenues of EUR 160m, Cerny said.

The group includes medifa GmbH & Co. KG, a German provider of medical technology for operating rooms, and Polish medical equipment manufacturer Famed Zywiec.

Last month, it acquired an unspecified stake in German laboratory infrastructure solutions specialist Lab Concept through its German company Koettermann Group for an undisclosed fee.

While strong in their domestic markets, all of these portfolio companies are also heavily export-driven, Cerny pointed out.

Acquiring more medtech players in existing regions will bring synergies including across sales networks and sharing know-how, he said.

Macroeconomic trends such as ageing populations, increased government and consumer spending and increased pressure on regulation, including pressure to increase product safety, make the health sector attractive for investment, Cerny said.

Small and mid-sized players may struggle to keep up with regulation and increasing overheads on their own, creating opportunities to invest in such companies, he said. He highlighted Koettermann Group, which BHM Group acquired as a distressed asset three years ago and has since turned around into a profitable and successful business.

It is easier to expand in the sector by acquiring existing players, Cerny noted, adding that there is also strong scope for organic growth.

However, the market is fairly concentrated with only a limited number of targets available, he said.

Private equity growth
In addition to its medtech focus, BHM Group acts as a dynamic private equity firm, generating PE-type returns, Cerny said. It wants to leverage the know-how, team and finances that it has built up over the past years, he said.

The group wants to be large enough to be competitive in the market while retaining a degree of agility and flexibility, he said.

At any time, the group is looking at three to five cases for new PE investments, Cerny said. It is mainly interested in high-tech manufacturing companies with their own products, he said.

This can also include distressed assets in Germany and central Europe, he said.

BHM Group always looks to acquire majority stakes in targets, Cerny said.

The firm‘s previous PE investments include a stake in Austrian office and retail real estate company Immofinanz, which was sold in 2021 to CPI Property Group, owned by Czech businessman Radovan Vitek. At the time of its exit, BHM Group was the third-largest shareholder in the company, which had assets of EUR 3.4bn, according to the company’s website.

BHM Group is also interested in wind and solar energy investments, investing at the early stage, Cerny said.

Its investments also include renewable energy projects, mainly in Scandinavia and the Baltics, including Finnish windfarm developer Winda. Since its investment in Winda the company has tripled in size, Cerny said. Winda’s early stage pipeline has 600 MW of projects under development, according to BHM’s website.

It often acquires land and developing wind parks, selling either at the permitted stage or once up and running, he said. BHM Group sold a 220 MW windfarm portfolio to BlackRock in 2021, as announced.

The firm is also eyeing renewable energy investments in central Europe as the regulátory environment has become more favourable, he said.

BHM Group is also a significant LP in Czech VC firm Presto Ventures‘ two funds, which combined have invested into around 50 startups.

CEE real estate
BHM Group also invests in commercial real estate, primarily retail parks and developing logistics parks. In logistics it currently has 220,000 square metres of built assets and land for a further 800,000 metres that it is developing, mainly in Slovakia, Slovenia and Croatia.

Last year, it acquired a portfolio of 10 retail parks in Poland valued at more than CZK 1bn (EUR 40m), according to the company’s website.

Its aim is to further invest “about a hundred million euros“ into real estate in CEE.

The group is in the early stages of weighing external investors for its real estate activities for the first time, following a number of approaches from interested parties, Cerny said.

Most of its investments are abroad, Cerny noted, adding that it focuses on markets where it has market know-how or strong partners.

BHM Group has completed a large amount of market screening and mainly sources deals in-house after building strong relationships with targets, Cerny said. But it also knows many advisers and is regularly approached with potential targets, he said.

BHM Group was established by Czech entrepreneur and industrialist Tomas Krsek in 2018. Krsek was previously the largest shareholder of Czech rolling stock manufacturer Skoda Transportation, which was sold to Czech investment group PPF in 2017. The firm has more than 30 investment professionals in its team.

Cerny was formerly CFO and board member at Skoda Transportation, responsible for M&A and the sale of the company.

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