Ratos-backed Contex divests two subsidiaries

Ratos has auctioned Contex imaging subsidiaries Z Corporation and Vidar Systems for an enterprise value of $137m. A majority of the proceeds will be used to deleverage the Contex Group, which held debt for all three subsidiaries.

The financial specifics of loan repayments and resulting leverage ratio for the remainder of the company has yet to be decided, but Ratos expects net proceeds of SEK 340-470m. Prior to the transaction, the net debt of Contex Group was reported as SEK 635m.

Previous funding
Contex was delisted from the Copenhagen Stock Exchange in 1999 by EQT. The company then acquired Z Corporation and Vidar Systems in 2002, following an undisclosed equity investment from the then owner. Ratos acquired 99% of the company in a secondary buyout in August 2007.

Company
Contex, originally founded in 1923, develops and produces large format 2D/3D imaging solutions. Based in Allerød, Denmark, the company employs 250 staff worldwide. It recorded SEK 750m revenue and SEK 97m EBITA in 2010.

People
Investment director Per Frankling worked on the deal for Ratos. Aage Snorgaard is CEO of Contex.

Advisers
Vendor – William Blair & Company (Corporate finance); Latham & Watkins (Legal).

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