Silver Lake buys friedola Tech stake from WHEB

Silver Lake invested €31m for its stake and will be the new majority owner alongside existing investor Kleiner Perkins Caufield & Byers (KPCB), which holds about 30% of the company, and the CEO whose stake is below 10%. WHEB kept a 10% stake in the company.

WHEB doubled the money it originally invested in the company over the two-year holding period. The GP told unquote" that it had negotiated with a number of PE and growth capital investors about a possible deal but Silver Lake's offer was most attractive economically – although the GP's minimum ticket size of €30m was more than WHEB originally envisioned.

The investment contained both replacement capital and growth capital and will support the company's international expansion, particularly in the US. The transaction marks the first co-investment between Silver Lake and KPCB.

Debt
The company has a small amount of operating debt, though no fresh debt was used in this transaction.

Previous investment
WHEB bought the company as part of an MBO in 2010. At the time of the buyout, friedola Tech was an under-appreciated asset suffering from the 2008/09 crisis in the global automotive industry. The company was heavily indebted and had built up an unfavourable reputation among customers.

WHEB invested around €10.8m to restructure the business, involving haircut deals and conversions into equity, which led to the GP securing a 90% stake. WHEB reduced its exposure to the business soon after by selling a 30% stake to KPCB.

Over the holding period the GPs stabilised the company financially and pursued an aggressive growth strategy. The company widened its product portfolio and worked at building customer relationships. It recently acquired a Bremen-based unit from Dura, which it fully integrated. The company's turnover doubled in the past three years from €33m in 2009 to more than €60m in 2012.

Company
Geismar-based friedola Tech was spun out from household products manufacturer friedola in 1990. The company processes and makes products out of recycled plastics, targeting the automotive and packaging sectors.

The company's main product is CON-Pearl®, a lightweight board made of high-quality recycled plastic, which is itself 100% recyclable. The company employs around 300 people.

People
Josh Raffaelli led the deal for Silver Lake, alongside Jörg Sperling, who represented WHEB.

Advisers
Equity – mb+p (Commercial due diligence); Deloitte (Financial due diligence); WilmerHale (Legal).
Vendor – Blackwood Capital Group (M&A).
Company – Taylor Wessing (Legal); Hogan Lovells (Legal).

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• Topics
• DACH
• Industrials
• Exits
• Expansion
• WHEB Partners
• Kleiner Perkins Caufield & Byers
• Germany
• Deloitte
• Taylor Wessing
• Hogan Lovells
• Partial sale