DBAG acquires Dantherm Group from Procuritas

Dantherm's management team is to retain a stake in the company following the deal, which is expected to complete in Q4 2021.

The deal is expected to generate a return of 5.5x money on invested capital, a source close to the situation told Unquote.

The deal is to be the fourth platform investment from DBAG Fund VIII, which held a final close in May 2020 on EUR 1.1bn and is now 26% deployed. The fund generally invests EUR 40m-100m in mid-market companies with enterprise values of EUR 75m-250m. DBAG VIII intends to commit the majority of its capital in the DACH region, with up to 25% available for investments elsewhere in Europe.

DBAG is to invest up to approximately EUR 28m via its balance sheet, amounting to a 14% stake in the company. The investment implies an equity value of around EUR 200m.

Following the investment, DBAG intends to support the company's continuing buy-and-build strategy and its organic growth. The GP said in a statement that it intends to take advantage of positive trends in the HVAC market, and that it expects to generate additional value via further integration of Dantherm's existing add-ons.

Procuritas acquired the HVAC business and the EMEA telecoms cooling operations of Dantherm in a carve-out in January 2016 in a DKK 164m (EUR 22m) all-equity deal. The GP invested via Procuritas Capital Investors V, which held a final close in June 2012 on EUR 200m.

The two portfolio companies now remaining in Procuritas V are Sweden-based car repair chain Werksta and engine-efficiency auto parts producer SEM.

Shortly after its acquisition by Procuritas, Dantherm acquired UK-based Calorex. In February 2017, the company bought Italy-based Master Climate Solutions (MCS) from Alcedo. Further acquisitions of European market peers included France-based Sovelor, Switzerland-based Schönmann, and Germany-headquartered Aerial and Heylo. Dantherm made almost 20 add-ons in total, Procuritas said in a statement.

In addition to building the company's European presence, Procuritas also invested in the company's sales capabilities and manufacturing capacity, as well as strengthening its management team, according to the same statement.

The company's EBITDA grew by 700% over the past five and half years, while its revenues tripled.

Unquote sister publication Mergermarket first reported in April 2019 that Procuritas was exploring exit options for Dantherm, with the company marketed to potential buyers based on EBITDA of DKK 110m (EUR 15m). Co-managing partners Mattias Feiff and Johan Conradsson told Mergermarket in June 2021 that Procuritas was still assessing a number of factors before making a decision on an exit for Dantherm.

Procuritas declined to comment.

Company
Founded in 1958, Dantherm designs and manufactures heating, cooling, drying, cleaning and ventilation for both portable and installed applications. It operates under the Aerial, Aircenter, BioCool, Calorex, Dantherm, Heylo, Master, SET and Sovelor brands.

Dantherm posted 2020 revenues of EUR 148m, versus DKK 310m (EUR 42m) at the time of its acquisition by Procuritas in 2016. The DACH region accounts for 30% of Dantherm's sales, according to a statement.

People
Deutsche Beteiligungs AG – Jannick Hunecke (member of the management board); Malte Hinz (managing director).
Procuritas – Hans Wikse, Oskar Lindholm-Wu (partners).
Dantherm Group – Bjarke Brøns (CEO).

Advisers
Equity - GCA Altium (M&A, debt advisory).
Vendor – DC Advisory (M&A); Kromann Reumert (legal); EY (financial due diligence).

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