Ermewa Group (Switzerland) - Oct 2007

unquote
01 October 2007

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Investors in Private Equity (IPE) has reinvested from its second fund in the Ermewa Group, keeping its previous stake of 51%. The financial investor had acquired the majority stake through its first fund in May 2003. After four years of investment, IPE needed to exit its holding and mandated Rothschild to run a sales process. The previous industrial partner, SNCF Participations, also reinvested and owns a 49% shareholding. acquired a majority stake in the SLV Group from the company’s founder and current managing director Franko Neumetzler.

Debt

Calyon and HSH Nordbank supported the transaction with a senior financing, while HypoVereinsbank provided a mezzanine package. The debt package is said to amount to €630m, including a €300m capex facility.

Company

Founded in 1957, Ermewa is a railcars and tank containers rental company. The latter is operated via the Eurotainer joint venture with Brambles Industries. The company is headquartered in Geneva and operates 40 subisdiaries in 20 countires including Swizterland, France, Italy, Germany, Belgium, the Netherlands, Austria, Czech Republic and Slovakia. In 2007 the company expects revenues of approximately €350m with an EBITDA of approximately €110m.

Exit Deal

In April 2003, IPE acquired a 50.4% stake in Ermewa Group (May 2003, page 23). SNCF Participations, as an industrial partner, took a 49.6% minority stake in the company (versus 45% previously), which was in line with its European strategy of alliances in rail transportation. Ermewa identified the need to restructure when the company’s founder, Jacques Bory, passed away. The deal subsequently originated from Evelyn de Rothschild Corporate Finance’s efforts to find a financial partner and Philippe Nguyen’s relations with SNCF. The proposal from IPE was accepted on the basis that it offered Ermewa Group an ambitious industrial project and the financial resources to invest in its core business of specialised railcars and tanker rental. The transaction consideration was estimated at €530m. The approximate deal value was €325m, comprising around €125m of equity and some €227m senior debt arranged by Crédit Agricole Indosuez. Private banking services were provided by UBS.

People

François Nicoly and Philippe Nguyen handled the transaction for Investors in Private Equity. Stefan Herschtel and Olivier Desfontaines worked on the debt package at Calyon. Franck Hermandung and Kerstin Schmidt represented HSH Nordbank, while Xavier Weisrock worked at HypoVereinsbank.

Advisers

Equity - Deloitte, (Financial Due Diligence)Equity - Rothschild, Hervé Sawko (Corporate Finance)Equity - Sarrau Thomas Couderc, Christine Lebreton, Jean-Bernard Thomas (Legal)

Sourced from: Deutsche unquote" 93 (Nov 2007)