Ardian acquires Schleich from HgCapital

Harriet Bailey
19 May 2014

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French private equity firm Ardian has acquired German toy manufacturer Schleich from HgCapital.

The enterprise value of Schleich is understood to be €220m.

Ardian acquired the company from its €2.4bn LBO Fund V, which launched in January 2012 with a target of €2bn, closing in October last year after Ardian finalised its spinout from parent company Axa.

Schleich's management team, which underwent significant changes in 2013, has acquired a substantial stake in the company as part of the deal. The fresh capital from Ardian will enable the toy producer to further penetrate international markets and new distribution channels, following a recent agreement to sell Schleich-branded products at Wal-Mart stores in the US.

In May 2013, unquote" reported that HgCapital had postponed its sale of Schleich after potential buyers failed to satisfy price expectations.

The deal is subject to customary closing regulations.

Debt
Debt facilities of €95m were provided by DZ Bank and LBBW in a 50/50 split.

Previous funding
HgCapital, together with the company's management team, acquired Schleich from three family groups in December 2006 for an undisclosed amount estimated to be more than €100m. The GP was introduced to the company by WGZ Corporate Finance Advisers and were attracted to its recent growth and strong branding. RBS structured a debt package consisting of senior and mezzanine financing.

Company
Founded in 1935 by Friedrich Schleich in Schwäbisch Gmünd, the Schleich brand is sold in more than 50 countries. The company has approximately 340 employees, up from 190 at the time of HgCapital's investment. Schleich manufactures traditional figurines and realistic "play world" concepts, which allow children to create their own toy landscapes.

The company generated sales of €106m in 2013, up from €61m in 2006. EBITDA is estimated to be in the region of €20-25m – a source informed unquote" that debt was slightly below 4x EBITDA.

In January last year, a change in management was implemented in order to boost growth. The new management oversaw the company's development of new product ranges, such as Bayala elves. Sales targets for Q1 2014 have already been exceeded, according to Schleich.

People
Thomas van Kaldenkerken is CEO of Schleich. Justin von Simson is partner at HgCapital. Caspar von Meibom is managing director at Ardian.

Advisers
Equity – OC&C (Commercial due diligence); Renzenbrink Raschke von Knobelsdorff Heiser (Legal); Wilkie Farr & Gallagher, Mario Schmidt (Legal); PwC (Financial due diligence); Taxess (Tax); Willis (Insurance due diligence); Golder (Environmental due diligence); Macquarie (Debt advisory); Commerzbank (M&A).
Vendor – Baker Tilly (Commercial due diligence); Clifford Chance (Legal); EY (Financial due diligence); KPMG (Tax); Goldman & Sachs (M&A).