DBAG sells Pmflex following trade approach

The disposal proceeds realised by DBAG are roughly in line with the investment’s fair value as at 30 September 2022, the statement said. The fund does not generally publish NAV figures for individual portfolio companies, a spokesman said.

Completion of the transaction is subject to approval by antitrust authorities. The transaction is expected to be closed during Q1 2023, it added.

The deal sees DBAG exiting the Italian manufacturer following an approach by trade buyer Hager Group last year, with the deal signed last December, managing director Thilo-Anyas König told Unquote.

“Hager approached us as they knew the business and the sector. They had already bought one of Pmflex competitors, Bocchiotti, in 2015,” he said. “They approached us to get a better perspective on how the business has developed over the past years, and soon after learning about the business and the synergy potentials, showed interest and started discussing a proprietary deal with us.”

During the investment period, DBAG supported the management with strategic development initiatives, including expanding the company’s market share in Europe. Additionally, Pmflex started several operational improvement projects to optimise its supply chain and logistics, including introducing a new software for production planning, he said.

It also took advantage of the Covid-19 pandemic period to gain market share. While many of its competitors struggled with raw material shortages, Pmflex was relatively more successful in sourcing manufacturing ingredients, König said.

Pmflex’s original investment case had included bolt-on acquisitions, and the company had several ongoing discussions, but they were terminated as Hager became serious with their approach, he said.

Pmflex generated around EUR 155m in revenue last year, equating to more than 20% growth per annum between 2020 and 2022, he said. EBITDA stood at EUR 25m in 2022, he added.

DBAG acquired a majority stake in Pmflex from the company’s founding family in September 2020, investing via its own balance sheet and DBAG Fund VII. DBAG Fund VII’s total investment in Pmflex amounted to approximately EUR 73m, of which DBAG contributed around EUR 11m, according to a statement.

DBAG raised EUR 1bn for its seventh fund in 2016 and has built up a portfolio comprising 12 companies. Pmflex is the third disposal for the vehicle, following radiology and radiotherapy platform Evidia and digital-transformation services provider Cloudflight.

The GP is currently deploying equity via DBAG Fund VIII, which raised EUR 1.1bn in 2020. It has plans to raise a ninth fund with a target of EUR 1.3bn-EUR 1.5bn in 2023, as reported.

Pmflex was DBAG’s first MBO in Italy, and the transaction underlines the importance of its ability to structure an investment as a German investor there, König said. The GP has since made two other investments in the southern European market, namely industrial waste recycler Itelyum, and MTWH, a metal accessories producer for luxury goods.

The GP plans to deploy up to a third of Fund VIII in Italy, where it opened a Milan office in 2021, as reported.

Company
Pmflex, formerly known as PM Plastic Materials, produces around 320,000 kilometers of electrical installation tubes annually in its two plants near Bergamo. Almost a third of the production is pre-wired tubes, which are mainly used for power supply, but also for telephony, networks and alarm systems. The pre-wired tubes reduce installation time for electricians by up to 50 percent, providing a cost advantage for new construction and renovation projects.

The pipes are delivered to more than 50 countries, with a focus on Sweden, Switzerland and France.

People
DBAG - Thilo-Anyas König (managing director); Tom Alzin (member of the board).
Hager Group - Daniel Hager (CEO).

Advisors
DBAG – KPMG (financial advisory); Latham & Watkins (legal); SPA, Fieldfisher (tax).

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• Topics
• Buyout
• Industrials
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• GPs
• DACH
• Deutsche Beteiligungs AG
• Germany
• DACH