Paragon Partners, GIMV prepare WEMAS for H2 auction

Gustav Hoejmark-Jensen , Patrick Costello and Joao Grando
12 May 2022

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Private equity firms Paragon Partners and GIMV are preparing to exit WEMAS Absperrtechnik, a German road safety equipment provider, four sources familiar with the situation said.

The co-owners have mandated William Blair to advise on the sale, three of the sources said. The process could kick off in the second half of the year, more likely towards Q4, two of the sources said, having originally been scheduled for earlier in the year.

WEMAS is being marketed off EUR 15m EBITDA for 2022 and EUR 60m sales, one of the sources said.

In 2020, WEMAS reported EUR 2.8m EBITDA on the back of EUR 43m revenue, down from EUR 9.5m EBITDA and EUR 48.9m revenue in the previous year, according to its most recent financial filings. An increase in other operating expenses that impaired profits by EUR 4.5m was attributed to the deconsolidation of Gerding GmbH and MIS GmbH, which was acquired by Triton-backed competitor AVS Verkehrssicherung for an undisclosed amount, as reported. WEMAS forecasts a "moderate" increase in sales and a slightly improved annual result in 2021, the same filings state.

Founded in 1971, WEMAS is a full-range provider of certified passive mobile road safety equipment, led by CEO Jochen Lütkemeyer and headquartered in Gütersloh, Germany. The company supplies both wholesalers and roadwork safety service providers who are in charge of road safety, infrastructure and construction markets, predominantly in the DACH region, according to its website.

It makes sense to launch a sale now because of the big backlog of construction work on infrastructure such as bridges and streets in Germany, one of the sources said, explaining that significant public investment is expected to flow into projects that require road safety equipment on site.

Paragon Partners and GIMV took joint control over WEMAS from NORD Holding in November 2017, as reported. At the time, Paragon Partners and Gimv took hold of approximately half the shares, while the remainder was held by the company's management team.

Operating in the same space, Triton was laying the groundwork to sell road safety services provider AVS Verkerssicherung in 2020, as reported, but a process did not materialise.

William Blair, Paragon Partners and WEMAS did not respond to requests for comment. GIMV declined to comment.