VAG Armaturen GmbH (Germany) - Jan 2008

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01 January 2008

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Halder has acquired a majority stake in VAG-Armaturen GmbH, Mannheim through a management buyout from Equita Beteiligungen Fonds 2 KG, Bad Homburg. In the course of the transaction, the management increased its stake in the company. The deal was sourced through a direct contact between Halder and EQUITA, as EQUITA was looking for a reliable partner for a smooth exit. Halder was attracted to the deal by the company’s strong position in a growing market, as water infrastructure is increasingly attractive. In addition to that, Halder was impressed by the strong management team.

The company is already in the process of globalisation, with a production plant in China and one production site currently being built in India. Together with Halder, the company plans to internationalise further in the coming years and will make important investments in Mannheim as well as in the international production sites.

Company

VAG-Armaturen designs, produces and distributes industrial valves and fittings for the water supply and waste water industry. The products are used in the sourcing, distribution, storage and supply of fresh and waste water. The company was founded in 1872. In 2006, VAG generated a turnover of €92m with 850 employees. Besides its headquarters in Mannheim, VAG currently operates three production sites in the Czech Republic, in China and in India, and recently established sales subsidiaries in Chile and Poland. More than 130 sales agents make up the company’s global distribution network.

Exit deal

EQUITA Management GmbH acquired VAG through its investment fund EQUITA Beteiligungen Fonds 2 KG from publicly-traded IWKA AG, based in Karlsruhe, in 2005 (January 2005, page 17). The investor’s original strategy for the company’s growth encompassed aiding with its internationalisation, relocation of production from Germany to an existing production facility in the Czech Republic, the establishment of a production facility in China and growth of the distribution and sales infrastructure. According to the investor, this phase of the company’s development has now been concluded and the new investor will lead the company into a new phase of expansion.

People

Marcel van Wijk, Paul De Ridder and Fabian Walesch handled the transaction for Halder. Equita was represented by Dr Michael Hönig and Bernd Stahlbock. Robert Fellner-Feldegg and Hans-Günther Hieronimus were the company executive MBO managers.

Advisers

Equity - ERM, (Environmental Due Diligence)Equity - KPMG, Johannes Weiler, Matthias Tombreul (Financial Due Diligence)Equity - KPMG, Ulrich Ackermann (Tax)Equity - Simon Kucher & Partner Bonn, (Market/Industrial Due Diligence)Equity - White & Case, (Legal)Vendor - KPMG, Hans Hannappel, Natalie Gibert, Philip Pejic (Financial Due Diligence)Vendor - KPMG, Dirk Lohrmann, Matthias Hogh (Tax)Vendor - Oldenbourg Plus Rechtsanwaelte , (Legal)