Gebrüder Gienanth-Eisenberg GmbH (Germany) - Dec 2007

unquote
01 December 2007

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Cognetas has purchased Gebrüder Gienanth-Eisenberg GmbH from Fink Holding, a family holding company. The transaction is expected to be completed in early 2008 subject to merger clearance being granted by the relevant authorities. The management will acquire a minority stake during this transaction. The competitive auction was run by Houlihan Lokey.

Cognetas has a strong track record of investments in leading niche companies in the industrial and automotive industries. The investor was impressed by the experienced management team which will be retained and backed in their strategy of further global growth and capacity expansion.

The investor considers the company to be strategically well positioned in highly-specialised and growing industry segments. The investor’s industry expertise and ability to capitalise on an excellent network, as well as its ability to keep the necessary momentum with respect to realising the debt financing for the deal were cited as decisive factors for it winning the deal.

Debt

LBBW Landesbank Baden-Württemberg provided a debt described as a typical A/B/C senior debt structure, with a mezzanine tranche on top and unfunded capex and working capital facilities also involved.

Company

Gebrüder Gienanth-Eisenberg GmbH is a producer of engine blocks for medium to large diesel and gas engines and of compacted graphite iron products for use in clutch and transmission systems in the automotive industry. Its engine blocks are used in power generation, in large-scale mining equipment and other off-road applications, in oil and gas exploration and pipelines, and in the marine shipping and rail locomotive industries. The company’s clutch and transmission products are used chiefly in passenger vehicles and tractors.

The company was founded in 1735 and is headquartered in Eisenberg. A long-established industry player with 900 employees, Gienanth numbers among its clients LuK, Cummins, Tognum (formerly MTU Friedrichshafen), General Electric, Daimler, MAN, and Deutz Power Systems. For the last couple of years, Gienanth reported double-digit growth per annum and had revenues of approximately €150m in 2007.

People

The Cognetas team comprised Michael Boltz, Johannes Meran, Frank Hermann and Andreas Krämer.

Advisers

Equity - L.E.K., (Commercial Due Diligence)Equity - PricewaterhouseCoopers Frankfurt, Achim Reimann, Michael Rolf, Richard Burton, Stephan Weaver, Verena Egert (Financial Due Diligence)Equity - SJ Berwin LLP, (Legal)Equity - Société Générale, (Other Consulting)Vendor - Houlihan Lokey Howard & Zukin, (Corporate Finance)

Sourced from: Deutsche unquote" 95 (Feb 2008)