Silver Investment forms continuation vehicle for PTF

SIP said in a statement that the transaction emphasises its long-term approach to its portfolio.

Silver Investment Partners invests on a deal-by-deal basis, as opposed to a traditional private equity fund structure. The firm targets companies with revenues of EUR 5m - EUR 100m, with a focus on those in the EUR 10 - EUR 50m turnover bracket, raising capital from a cornerstone institutional investor, as well as high-net-worth individuals and family offices.

The GP acquired PTF in 2011 and it has since made two add-ons: Heinz Kehl & Sohn in 2012; and Hitega Präzisionsmechanik GmbH in 2014. The company has also expanded its product potyfolio during this period, according to a statement.

"After some difficulties with previous management, we changed the whole management team a couple of years ago," SIP managing partner Philip Amereller said of the company's recent development. "Shortly after this, the company started to develop really well."

This has translated to its projected EBITDA growth for 2022, which is now at more than 10%, equating to a projected EBITDA of EUR 7m.

In addition to a change in its underlying investors, PTF's capital structure has changed following the deal, with the company's management increasing their shareholding in the firm. Managing director Eckehard Mielke will own a 15% stake in the business, versus 5% prior to the transaction.

SIP had initially considered exiting PTF before deciding to form a continuation fund, Amereller told Unquote. "Before Covid, we thought it would be a good time to sell, since performance was good, and there was a market for it," he said. "But once the pandemic hit, we didn't want to sell at a discount due to the lack of visibility. Last summer, we started preparing for an exit, but the management team still saw a lot of opportunities and we therefore felt that it was the wrong timing for an exit."

Selling investors have made returns of 6x their original investment, according to a statement.

The process took four weeks from approaches to new investors to signing; existing investors were approached three weeks prior, Amereller said.

Existing SIP investors who have previously backed its deals have contributed 60% of the capital for the continuation fund, with new investors contributing 40%. "We did not bring on board any specialised secondaries investors, but we gave every existing investor the opportunity to reinvest or increase their share, so we felt that there was no conflict with regard to the valuation," Amereller said.

The sell-side was advised by KWM, while Luepp + Partners advised the buyside.

Headquartered in Stollberg, PTF manufactures aluminium, stainless steel and titanium precision parts for use in semiconductors, laser optics, medical technology and measuring technology. The firm also specialises in component assembly. It employs around 300 staff.

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