3i makes 4.4x on €307m sale of Atesteo to IHO

The sale ends a four-year holding period for the GP, which acquired Atesteo for a €77m equity investment in September 2013.

Under 3i's ownership, EBITDA has more than doubled from €14m in 2013 to around €30m projected for 2017. The GP stated it had achieved this by improving systems and processes and implementing growth initiatives leading to a 30% increase in testing capacity.

Additionally, the company has doubled its capacity in the Chinese market, increasing its number of testing benches in China from 10 to 20.

The original buyout was an all-equity transaction but the business has been refinanced twice by 3i and €45m was invested in growth initiatives.

Previous funding
3i acquired a majority stake in Atesteo (then Gesellschaft für Industrieforschung (GIF)) for a €77m equity investment in an all-equity buyout with an enterprise value of approximately €100m. The firm's CEO Ulrich Ross took a minority stake in the transaction.

In June 2016, Atesteo underwent a €70m all-senior debt refinancing, consisting of a €45m term loan B and a €25m revolver. 3i's total investment in Atesteo amounted to €95m at this stage and the proceeds of the refinancing were used to repay €59m of shareholder loans, returning more than 60% of the GP's investment.

3i supported two acquisitions for Atesteo in 2017: the bolt-on of Kernen-headquartered competitor Straesser in September and TÜV Süd's engine/drivetrain technology and components testing division earlier in the year. 

Company
Atesteo is headquartered in Alsdorf and was founded in 1986 under the name GIF. It is a drivetrain testing specialist with 800 employees and 135 drivetrain test benches in Germany and China. Its customers include automotive and transmission manufacturers. The company offers quality assurance through efficiency endurance tests and functional tests of manual and automatic transmissions, differentials, and hybrid and electric powertrains.

People
3i Group – Ulf von Haacke (partner).
Atesteo – Wolfgang Schmitz (chairman).

Advisers
Vendor – Rothschild (M&A).

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