Lafayette acquires PPM Pure Metals' Osterwieck site

Harriet Matthews
15 September 2020

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Lafayette Mittelstand Capital has acquired in a carve-out PPM Reinstmetalle Osterwieck from its insolvent parent company PPM Metals, a subsidiary of France-based Recyclex, effective as of 1 August 2020.

Unquote sister publication Mergermarket reported in July 2019 that Recyclex was looking to sell PPM Pure Metals, which accounted for around 5% of its total turnover of €365m in 2019.

PPM Reinstmetalle Osterwieck was formerly a subsidiary of PPM Metals, which had been in restructuring proceedings and subsequently filed for insolvency in May 2020 as a result of the Covid-19 pandemic. The Osterwieck operations were profitable at the time of the insolvency filing.

A China-based strategic buyer had initially been found for the business, but the purchase was halted by the German government due to concerns about defence and security, since PPM produces certain military grade materials, a spokesperson for Lafayette told Unquote.

A buyer was found for the Osterwieck operations within six weeks, the spokesperson said, following talks with a small number of investors led by the company's insolvency administrator, SGP Schneider Geiwitz.

Lafayette and the company's management plan to implement a growth plan for the business, including expansion into the electronics and chemicals markets. Lafayette expects the company could report EBITDA margins of around 20% in future, a spokesperson told Unquote.

Ulrich Kammer and Jan Freerks Riecken are now co-CEOs of the business, according to a statement.

Lafayette invests in DACH-based Mittelstand businesses with revenues of €15-150m, investing in special situations including spin-outs. The GP deployed equity via Lafayette Mittelstand Capital II, which held a final close in June 2017 on €54.5m. The fund expects to make three or four further platform investments. The transaction is not currently leveraged.

Company
PPM Reinstmetalle Osterwieck produces arsenic and minor metals for use in the telecommunications and semiconductors industries for the production of electronics products and solar panels. PPM's Osterwiek site was formerly metals business Astron, which PPM acquired from insolvency in 2006. The site has 30 employees and generates revenues of €10m.

People
Lafayette Mittelstand Capital – Hermann Reitze (partner).
PPM Metals – Ulrich Kammer, Jan Freerks Riecken (co-CEOs).

Advisers
Equity – Bub Memminger (legal).
Vendor – Sigma (corporate finance).