Global private equity firm Advent International, the, has agreed to sell Axtone, Europe's largest rail freight buffer manufacturer, to IK Investment Partners, the European private equity business formerly known as Industri Kapital. Terms of the sale, which is subject to regulatory approval, were not disclosed.

When Advent acquired Kamax, a mid-sized Polish business, in January 2006, the company was a Polish-based specialist in rail wagon buffers, coupling and shock absorber manufacture and maintenance, with an excellent engineering base and strong presence in Russia, but struggling to gain traction in Western Europe.

Advent simultaneously purchased Keystone Bahntechnik, a German supplier of rail wagon buffers, crash systems and coupling devices to original equipment manufacturers throughout Europe and the Middle East.

The combined group, renamed Axtone, became the European leader in the sector with headquarters in Kanczuga, Poland, under the leadership of chief executive Marcin Kowalczyk, a former senior executive at Swedish-Swiss engineering group ABB.

Axtone has achieved growth in Western Europe as well as in rapidly-growing rail markets such as Russia, Ukraine, China and India. Turnover for Kamax on acquisition was EUR24m and the two companied had combined sales of EUR49m in 2006, but Axtone forecasts more than EUR70m in turnover this year.

The transaction is IK's first direct investment in Eastern Europe, part of a strategy to invest directly in Poland, Czech Republic, Slovakia, Hungary and the Baltic states to balance its activities in the Benelux countries, France, Germany and Scandinavia.

Axtone is also IK's first investment in the railway industry, at a time when demand for rail transport products and services is expected to benefit from more global trade using rail, driven by increased rail infrastructure investment, environmental priorities and high fuel costs.

'We are delighted to acquire Axtone, a leading European supplier to the rail industry in Poland and Germany,' says Detlef Dinsel, IK's managing partner responsible for Germany and Central and Eastern Europe. 'We look forward to working with Axtone management in further developing the company into a global leader for shock absorption technology for railways.

'Our intention is to apply IK's buy-and-build strategy and to capitalise on growth opportunities as rail networks are expanded and modernised in many countries. This transaction represents IK's first direct investment in Central and Eastern Europe.'

Monika Morali-Efinowicz, head of Advent International in Poland, says: 'Together with Axtone's management, we have implemented a successful growth programme and transformed a mid-sized Polish company into a market leader in both Eastern and Western Europe, with a developing business in the key markets of Russia, India and China.

'Axtone demonstrates our ability to accelerate growth in Central and Eastern European companies, particularly when that growth involves international expansion, access to new markets and technologies.'

Advent was advised by Close Brothers (M&A), Clifford Chance (legal), Ernst & Young (financial and tax), Environ (environmental) and LEK (commercial), while IK's advisers were Freshfields (legal); Clifford Chance (legal financing), BCG (commercial), Ernst & Young (financial), Bank Austria Creditanstalt (financing), Golder (environmental) and Marsh (insurance).

IK Investment Partners has raised a total of EUR5.7bn, including EUR1.7bn for its latest IK2007 fund, and has acquired 67 companies since 1989. The current portfolio encompasses 20 companies with aggregate turnover close to EUR7bn. IK invests mainly in mid-sized companies with strong cash flow and profit improvement potential, operating in mature industries with fundamental underlying growth.

Founded in 1984, Advent International has more than 115 investment professionals at offices in 15 countries across Western and Central Europe, North America, Latin America and Asia. The firm focuses on international buyouts, strategic restructuring opportunities and growth buyouts, and since its establishment has raised USD24bn in private equity capital and completed more than 200 transactions valued at more than USD36bn in 35 countries. Advent has been investing dedicated funds in Central and Eastern Europe since 1994 and closed its fourth fund for the region in April with EUR1bn.

       

Latest Jobs

Upcoming Events