Deal in Focus: OEP's bolt-on focus wins Duran deal

Duran, understood to have fetched €170m in the early-December deal, will look to make significant acquisitions as part of its ongoing development plan. One Equity Partners, with both German and international offices, will seek to leverage its global footprint in order to grow the Wertheim am Main-headquartered company globally. It will also take a seat on Duran's supervisory board.

Duran manufactures borosilicate glass for the life sciences, pharma and healthcare industry. The glass is resistant to both heat and chemicals and is used in laboratory and industrial glassware. Its 700 employees are split between its two Germany locations, its Croatian plant and two subsidiaries in the UK and India.

Florian Meise, founder and managing director of Adcuram, stated the divestment process was only decided upon earlier this year, after the vendor received unsolicited offers from both strategic and financial investors. The question of whether to support Duran's strategic growth plans or to let somebody else take over was a difficult call, says Meise: "We have developed this company so intensively over the last 10 years. But I believe we have completed 80-90% of what we can do operationally - and it's a good time to sell in these markets."

Neither Adcuram nor Duran's management saw the company's future as part of a conglomerate, however. "A financial investor - private equity - has a very clear interest: to increase the value of Duran. From the beginning, OEP was deeply involved, developing fresh ideas. We had a good feeling that this would be the owner to drive the business forward. And management was convinced," says Meise.

Complex carve-out
Although Meise describes OEP's latest purchase as "a classic leveraged buyout" which took only a couple of months to finalise, the private equity firm will continue to feel the benefits of the groundwork done by Adcuram in the beginning.

Schott, which sold Duran to Adcuram in 2005, was originally founded as a glass laboratory in Jena in 1884, before growing into a speciality glass manufacturer for industrial clients. Following its conversion from a foundation enterprise to a corporation in 2004, Schott decided to divest its non-core assets. Enter Adcuram.

The transaction would prove to be a "pretty messy carve-out", according to Meise. The Duran unit was so highly integrated with Schott, it was clear the glass melting operation would not be relocated, he adds.

In order to find a way for Duran to become an independent organisation, but also to continue a good working relationship with Schott, the transaction took around a year to hash out. "This carve-out involved 120 contracts. We had to define every single service and relationship that the business used and redefine it. Not only that, but we had to design global distribution agreements that worked for both parties. Not to mention the questions of brand sharing and technology protection," explains Meise.

Although the partnership between Duran and Schott was initially designed for five years, subsequent extensions will see OEP's new purchase continue as per Adcuram's plans. "It has worked well for both parties," says Meise. "Duran is still on the production side of Schott, which gives it access to Schott's know-how and purchasing synergies, while Schott receives a significant contribution margin from Duran."

At the time of the initial acquisition, official revenues for Duran were worked out to be around €70m. Following Adcuram's three-phase plan to create an independent business - involving installing new management, investing in new products and implementing a buy-and-build strategy - revenues stand around the €100m mark.

Advisers
Vendor - N+1 (M&A); P+P Pöllath+Partners (Legal); Tracc Legal (Legal); PwC (Vendor due diligence).
Equity - Freshfields (Legal); EY (Financial due diligence).

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• Topics
• DACH
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• Deal in focus
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• Unq2015Jan