Summit Partners puts RFID manufacturer ELATEC up for sale

Goldman Sachs is advising on the process, the three sources plus a fourth source familiar with the situation said. Teasers were sent out earlier this year, according to three of the sources.

ELATEC is being marketed off around EUR 25m EBITDA for 2022, two of the sources said. Forward-looking EBITDA could stretch to EUR 30m-EUR 35m, according to another source, adding that reported EBITDA could be closer to EUR 20m on the back of EUR 60m revenue.

The year-on-year increase in EBITDA is in line with ELATEC's growth trajectory, as the company posted EUR 18m EBITDA in 2021 and around EUR 15m EBITDA the year before that, one of the sources noted.

The sellside is running a broad process and approaching financial sponsors in addition to a swathe of potential strategic buyers, the same source continued, adding that premarketing activities took place late last year ahead of a formal sale launch.

Vitruvian Partners is tipped to be among the sponsors looking at Elatec, according to one source.

Because ELATEC develops both hardware and software and its RFID readers are vendor agnostic, it should do "quite nicely" among bidders, one of the sources said. Under Summit's ownership, the company has diversified well and seen good development, a fifth source familiar said.

In 2020, ELATEC reported EUR 31.3m revenue and EUR 8.4m EBIT, down "only slightly" despite the Covid-19 pandemic, from EUR 32.6m revenue and EUR 10.8m EBIT the year before, according to its most recently available financial filings. ELATEC had around 80 employees and posted margins of 57% in 2020, the same filings state.

While the pandemic slowed down the company's development, advancing digitalization and an increasing awareness for security solutions created "favourable" conditions for ELATEC's business areas, the same filings state. ELATEC expected a "marginal" growth rate for 2021 due to the pandemic, the filings said.

Summit acquired an undisclosed majority stake in ELATEC in 2018 from DPE Deutsche Private Equity in February 2018.

Founded in 1988 and based in Puchheim near Munich, ELATEC is a provider of "highly configurable" RFID solutions for applications and end-markets such as printing, computing, manufacturing and the Internet of Things (IoT), according to Summit's website. It designs and manufacturers both contact and near-field contactless readers and writers for work optimization, workforce management and security.

ELATEC's offerings are compatible with more than 60 transponder technologies, run on high-frequency and low-frequency as well as with near-field contactless (NFC) and Bluetooth Low Energy (BLE) readers and are certified in more than 100 countries, according to the company's website. Use cases include providing access control for buildings or security areas or user authentication services for car-sharing providers.

Goldman Sachs declined to comment. Summit, Vitruvian, and ELATEC did not respond to requests for comment.

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