Capiton buys Kautex Maschinenbau from Steadfast

Carmen Reichman
31 January 2013

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Capiton AG has acquired German manufacturer Kautex Maschinenbau in an SBO from Steadfast Capital valued at €50-100m.

Steadfast generated a 3.6x money multiple and an IRR of circa 25%. The GP decided to exit the business because it had reached its typical returns goal of 3x money multiple. It mandated Hauck & Aufhäuser to find a buyer for the company - the auction included private equity houses and trade players.

Caption emerged as the highest bidder, and allowed the company's management team to up its stake. Management now owns the majority of the business, having increased its stake to 50.1% as part of the transaction.

Capiton financed the transaction with equity from the Capiton IV fund as well as bank debt. The GP expects above-average growth for the company due to increased demand for its blow moulding technology in additional industry sectors.

Debt
Bank financing was provided by Landesbank Baden-Württemberg (LBBW), HSH Nordbank and WGZ Bank.

Previous funding
Steadfast acquired Kautex in a management buyout from Munich-based restructuring firm Adcuram in 2007. Kautex expanded geographically, particularly in Asia, and also strengthened its service arm and product offering.

Steadfast did not invest any fresh equity in the business over time but the company paid down its debt to minimal levels, the GP said. Kautex's turnover doubled to just more than €100m and its EBITDA increased by 50%. By the time of exit the company employed 500 people, about 150 more than at the time of the original buyout.

Company
Kautex manufactures high-end extrusion blow moulding machines used for industrial and consumer packaging and the production of automotive parts. A key application of Kautex machines is the production of plastic fuel tanks for passenger cars. Kautex has grown strongly in Asian markets in the past few years, according to Steadfast. The business was founded in 1935.

People
Clemens Busch and James Homer represented Steadfast in the transaction, while Andreas Denkmann, Christoph Karbenk and Theodor Wuppermann represented Capiton.

Advisers
Equity - CMS Hasche Sigle, Ralf Kurney, Jens Moraht (Legal); PwC, Ralf Niederdrenk, Richard Siedek, Lars Lawall (Commercial due diligence, financial due diligence, tax); Aon, Manfred Esser, Hansjörg Pezzei (Insurance due diligence); Environ, Mathias Stein (Environmental due diligence); Keystone, Christian Stein (Management due diligence); Cubus Partners, Richard Rösener (Debt); Ramcke & Co., Mihai Lupascu (Corporate Finance).
Vendor – Hauck & Aufhäuser, Wolfram Schmerl, Jens Willenbockel (Corporate finance); Deloitte, Karsten Hollasch, Andreas Schmitz (Financial due diligence); Heuking, Pär Johansson, Adi Seffer (Legal); Ernst & Young, Uwe Bühler (Tax); Tauw, Sebastian Katsch (Environmental due diligence).
Debt - Ashurst, Sebastian Schoon, Anne Grewlich, Carsten Endres, Thomas Freund, Klaus Herkenroth, Heiko Penndorf, Philip Cavaillès (Legal, tax).