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Unquote
  • Exits

Felss Group backer Capvis lines up PwC to guide sale process

Car engines and automotive parts
  • Patrick Costello
  • 24 August 2023
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Felss Group’s sponsor Capvis has appointed PwC to explore exit options for the German cold-forming specialist, three sources familiar with the situation told Unquote sister publication Mergermarket.

A sale of the Königsbach-based company is under way, two of the sources said, one noting the process is still in its initial phases.

Felss Group posted around EUR 15m EBITDA and generated around EUR 150m sales in 2022, these two sources said, with the third source suggesting Felss Group posts closer to EUR 18m EBITDA.

The sellside is expected to gear the process towards strategic or Asia-based buyers, one of the sources said.

Financial sponsors could be put off in part by Felss’ exposure to the automotive sector and heavy machinery, a fourth source familiar said. Trade buyers, including Swiss or North American-based industrials firms, might find better opportunities for value creation here, this source added.

Still, the vendor is already registering “strong interest” in Felss in initial discussions with potential buyers, one of the sources said. The company is also well-positioned for growth in the e-mobility sector via its proprietary technology, and Felss Group has an innovation pipeline in place to strengthen its e-mobility business and expand further into markets outside automotive, this source said.

In FY21, Felss Group reported around EUR 17.5m operating EBITDA including subsidies on the back of EUR 139.5m revenue, up from EUR 3.7m operating EBITDA and EUR 137.3m revenue the previous year, according to its most recently available financial filings.

For 2022, it expected “significant increases” in sales and operating EBITDA and forecast around EUR 165m revenue and EUR 14.2m operating EBITDA for FY22, the same filings state.

Felss Group has a score of 29, according to Mergermarket’s Likely to Exit (LTE) predictive algorithm*, weighted by how long it has been under these sponsors’ ownership, and the length of time since its last bolt-on acquisition.

Switzerland-based Capvis acquired a majority stake in Felss Group in January 2017 for an undisclosed sum as part of a succession situation, with the previous sole shareholder Christine Kienhoefer retaining a “substantial” shareholding in the company, as reported. At the time, Felss Group generated around EUR 125m revenue.

In 2019, Felss Group acquired German machinery company Heinrich Mueller Maschinenfabrik (HMP) for an undisclosed sum.

Founded in 1905, Felss Group specialises in the cold forming of tubes and solid materials for the automotive industry, mobility sector and other industries, according to its website. The company consists of two divisions: Felss Systems, for mechanical engineering, and component-manufacturing business Felss Rotaform.

Felss Group has around 1,000 employees across locations in Germany, Switzerland, Slovakia, the US and China, according to Capvis’ website.

Capvis declined to comment. PwC and Felss Group did not respond to requests for comment.

by Patrick Costello in Berlin

*Based on a number of key industry, holding behaviour, and dealflow criteria, Mergermarket's next-generation platform assigns a Likely to Exit (LTE) score to each exit opportunity, with a higher score corresponding to a higher likelihood for an imminent transaction.

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