3i Group PLC completes investment in Formel D and introduces CITIC Capital as investment partner

3i Group plc (“3i”) today announces that it has completed its investment in Formel D, a global service provider to the automotive and component supply industry. Following the closing, 3i has introduced CITIC Capital China Partners III, L.P., a buyout fund managed by the private equity arm of CITIC Capital Holdings Limited (“CITIC Capital”) as an investment partner. CITIC has invested c€72m in the company and 3i’s investment is c€155m.

On 12 May 2017, 3i signed a definitive agreement to purchase Formel D from Deutsche Beteiligungs AG (DBAG) and DBAG Fund V. This transaction was subject to customary regulatory approvals, all of which have been granted. 3i intended to introduce a strategic partner post-closing with the view to supporting its investment strategy for Formel D. CITIC Capital is a strong partner with a broad network in China, which will help Formel D build its regional operations and further benefit from the anticipated market growth in Asia.

Ulf von Haacke, Partner & Head of Industrial at 3i, said: “We are delighted to welcome CITIC Capital as our investment partner in Formel D. Their insights into the Chinese automotive market will be invaluable as Formel D continues its growth in this market.”

Headquartered in Hong Kong, with offices in Shanghai, Beijing, Shenzhen, Tokyo and New York, CITIC Capital’s private equity arm leverages its extensive resources to help companies realise their full potential in Asia, and has completed over 50 investments over the past years in China, Japan, the US and Australia. The firm currently manages US$4.8 billion of committed capital.

Boon Chew, Senior Managing Director of CITIC Capital, commented: “The investment in Formel D is our first deal in Germany. We are happy to partner with the renowned investor 3i and are looking forward to jointly supporting the successful growth of Formel D. We are committed to adding significant value to the company’s development, in particular by using our expertise and network in Asia.”

Formel D has a strong track record and has outperformed the market over the last 10 years. Growing at an average of 17% p.a., Formel D differentiates itself through its global scale, premium customer relationships and comprehensive service offering: it is the only player offering quality services along the entire automotive value chain. 3i and CITIC Capital plan to support Formel D’s international growth by rolling out its existing services to clients in other geographies, expanding its client base in Asia, and increasing its higher “value add” services such as vehicle test specification and virtual testing.

Dr. Juergen Laakmann and Dr. Holger Jené, Managing Directors of Formel D, added: “We are excited to work with 3i and CITIC Capital. Formel D’s international success story has just begun and we feel the combination of 3i and CITIC Capital is an exceptional one to further drive the next phase of our growth.”

Baird served as financial advisor and Willkie Farr & Gallagher LLP served as legal counsel to 3i. Harris Williams & Co. served as financial advisor and Shearman & Sterling LLP served as legal counsel to CITIC Capital.

Cromology amends its banking terms

Wendel is pleased to announce that Cromology, one of Europe’s leaders in decorative paints, has executed a bank amendment approved by nearly all of its lenders.

Cromology has amended the terms and conditions of its bank loans with a covenant reset. In so doing it has increased its financial flexibility and taken the steps necessary to pursue its plans for growth and development. As part of the transaction, Cromology has also increased drawdown capacity under its lines of credit by a total of €20 million. The cost of Cromology’s debt will remain the same.

This transaction will make a positive contribution to long-term value creation at Cromology, which is majority-owned (87.3%) by Wendel.

Wendel welcomes today’s announcement by Constantia Flexibles, one of the world’s leaders in flexible packaging, that it has signed an agreement to sell its Labels business to Multi-Color Corporation, for an enterprise value of approximatley €1.15 billion(1.3 billion USD). Subject to customary regulatory approvals, the sale transaction is expected to be finalized in the fourth quarter of 2017. The majority of the transaction is payable in cash, while Constantia Flexibles will hold a 16.6 % equity holding in Multi-Color, thereby becoming its largest shareholder.

This value-creating transaction will give Constantia Flexibles additional resources to bolster its growth strategy in the flexible packaging market, where it is a leader in segments such as confectionery foils, die-cut lidding, alu-container systems and pharmafoil. Moreover, in becoming the largest shareholder of a company bringing together Constantia’s and Multi-Color’s labels businesses, Constantia Flexibles will retain an exposure to the growth of this market.

Frédéric Lemoine, Chairman of Wendel’s Executive Board and Chairman of the Supervisory Board of Constantia Flexibles, said, “I am very pleased with this excellent transaction, which will give Constantia Flexibles additional resources to pursue its growth and development in flexible packaging in the coming years.

Since 2015, Wendel has supported Constantia Flexibles in its international growth and development. During this time, Constantia has, in particular, acquired five companies in Europe and emerging markets. Today’s strategic transaction will enable Constantia Flexibles to focus on flexible packaging and step up its investments in innovation and growth through further value-creating acquisitions that will give it exposure to new markets and new initiatives that will generate organic growth.”

Alexander Baumgartner, CEO of Constantia Flexibles, said, “Following a detailed strategy review, we decided that our top-performing Labels division would be better suited with another partner, which will support its ongoing growth story. At the same time, Constantia Flexibles will participate in the future success story of Multi-Color as its largest shareholder. Constantia Flexibles will use proceeds from the transaction to deleverage its balance sheet and enable further acquisitions in the dynamic and consolidating flexible packaging industry. We will also focus on innovative products and services, as well as new technologies to strengthen our existing Food and Pharma divisions.”

Constantia Labels is a global supplier of labels to the beverage, food and home & personal care industries (HPC). The Labels division achieved sales of €605 million in 2016, compared with Constantia Flexibles’ total sales of €2.1 billion in the same year.

Established in 1916, Multi-Color is one of the largest label companies in the world, serving some of the most prominent brands in the following market segments: healthcare, HPC, food & beverage, consumer durables and wine & spirits. Following completion of the transaction, Multi-Color is expected to achieve pro forma sales of ca. 1.6 billion USD and EBITDA of ca. 300 Million USD.

This transaction will make a positive contribution to long-termvalue creation at Constantia Flexibles, which is 60.5% owned by Wendel, its majority shareholder.

• EQT VII to acquire Belgium based Desotec, a European market leader in mobile industrial filtration technology, from AAC Capital Partners

• Desotec has pioneered the market for mobile activated carbon filters and has achieved strong top-line growth over the past decade

• EQT VII to support Desotec on its continued growth and transformation journey by investing in the commercial organization and supporting further international expansion

The EQT VII fund (“EQT VII”) has entered into an agreement to acquire Desotec (or “the company”) from Private Equity firm AAC Capital Partners and other minority owners.

Founded in 1990, Desotec has pioneered the market for the purification of liquids and gases through mobile activated carbon filters. During its more than 25 years in business, the company has established itself as a European market leader in this field. Desotec provides a filtration technology that enables its customers to comply with increased environmental regulations and sustainability requirements and to serve mission-critical filtration needs offering a flexible rental solution.

The company operates three state-of-the-art reactivation furnaces with a combined annual total capacity of around 12,400 tonnes of output. In addition, it has a fleet of around 1,500 mobile filters. Desotec has achieved an average annual top-line growth of 16% over the past decade and in 2016 generated approximately EUR 50 million in sales. Desotec has 110 employees.

“We are very excited to have EQT as our new owner and look forward to working together closely. EQT’s industrial approach, global presence and broad network will be of great value to Desotec as we embark on our next phase of growth. We believe that EQT’s entrepreneurial spirit will be play an important part in our future success”, says Desotec’s CEO Mario Hertegonne.

Kristiaan Nieuwenburg, Partner at EQT Partners, Investment Advisor to EQT VII, says: “We are impressed by the high quality of Desotec’s management and operations. The company has a true market leading position in the mobile filtration market, which it has successfully built over the past decade. We look forward to supporting the management team to expand into new markets and continue to invest in further growth”.

Marc Staal, Managing Partner at AAC Capital, says: “During our investment period we expanded Desotec’s footprint throughout Western-Europe resulting in an annual EBITDA growth of 17.5%. Together with Mario Hertegonne and his team we implemented a comprehensive market strategy, developed new applications through innovation and opened a third state-of-the-art reactivation furnace. We are confident that Desotec will continue to flourish under its new ownership and we wish the business and all its employees every success in the future”.

The transaction is expected to close in August 2017. The parties have agreed not to disclose the transaction value.

Contacts:
Kristiaan Nieuwenburg, Partner at EQT Partners, Investment Advisor to EQT VII, +31 20 262 4001
EQT Press office, +46 8 506 55 334

About EQT
EQT is a leading alternative investments firm with approximately EUR 37 billion in raised capital across 24 funds. EQT funds have portfolio companies in Europe, Asia and the US with total sales of more than EUR 19 billion and approximately 110,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.

More info: www.eqtpartners.com

About Desotec
Desotec is a leading European provider of mobile filtration technology through a unique and circular service concept. The company is headquartered in Roeselare, Belgium, and has established a pan-European platform with strategically located service centers in Spain and Poland and a workforce of 110 employees.

More info: www.desotec.com

About AAC
With offices in Amsterdam and Antwerp, AAC is a leading Benelux mid-market buy-out firm, which has to-date completed 31 management buyouts. It targets opportunities for majority stakes in profitable, cash-generative companies headquartered in the Benelux. AAC’s deal size is typically between €10 and €150 million. AAC is a growth-oriented investor, with such companies in its portfolio as Verasol, Corilus, Lubbers Transport Group and Hobré Instruments.

More info: www.aaccapital.com

• EQT VII to acquire Belgium based Desotec, the European market leader in mobile industrial filtration technology, from AAC Capital Partners
• Desotec has pioneered the market for mobile activated carbon filters and has achieved strong top-line growth over the past decade
• EQT VII to support Desotec on its continued growth and transformation journey by investing in the commercial organization and supporting international expansion

The EQT VII fund (“EQT VII) has entered into an agreement to acquire Desotec (or “the company”) from Private Equity firm AAC Capital Partners and other minority owners.

Founded in 1990, Desotec has pioneered the market for the purification of liquids and gases through mobile activated carbon filters. During its more than 25 years in business, the company has established itself as the European market leader in this field. Desotec provides a filtration technology that enables its customers to comply with increased environmental regulations and sustainability requirements and to serve mission-critical filtration needs offering a pay-for-use rental solution.

The company operates three state-of-the-art reactivation furnaces with a combined annual total capacity of around 12,400 tonnes of output. In addition, it has a fleet of around 1,500 mobile filters. Desotec has achieved an average top-line growth of 16% annually over the past decade and in 2016 generated approximately EUR 50 million in sales . Desotec has 110 employees.

“We are very excited to have EQT as our new owner and look forward to working together closely. EQT’s industrial approach, global presence and broad network will be of great value to Desotec as we embark on our next phase of growth. We believe that EQT’s entrepreneurial spirit will be play an important part in our future success”, says Desotec’s CEO Mario Hertegonne.

Kristiaan Nieuwenburg, Partner at EQT Partners, Investment Advisor to EQT VII, says: “We are impressed by the high quality of Desotec’s management and operations. The company has a true market leading position in the mobile filtration market, which it has successfully built over the past decade. We look forward to supporting the management team to expand into new markets and continue to invest in further growth”.

Marc Staal, Managing Partner at AAC Capital, says: “During our investment period we expanded Desotec’s footprint throughout Western-Europe resulting in an annual EBITDA growth of 17.5%. Together with Mario Hertegonne and his team we implemented a comprehensive market strategy, as a result of innovation developed new applications and opened a third state-of-the-art reactivation furnace. We are confident that Desotec will continue to flourish under its new ownership and we wish the business and all its employees every success in the future”.

The transactio is expected to close in August 2017. The parties have agreed not to disclose the transaction value

Contacts:

Kristiaan Nieuwenburg, Partner at EQT Partners, Investment Advisor to EQT VII, +31 20 262 4001

EQT Press office, +46 8 506 55 334

About EQT

EQT is a leading alternative investments firm with approximately EUR 37 billion in raised capital across 24 funds. EQT funds have portfolio companies in Europe, Asia and the US with total sales of more than EUR 19 billion and approximately 110,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership. More info: www.eqtpartners.com

About Desotec

Desotec is a leading European provider of mobile filtration technology through a unique and circular service concept. The company is headquartered in Roeselare, Belgium, and has established a pan-European platform with strategically located service centers in Spain and Poland and a workforce of 110 employees. More info: www.desotec.com

About AAC

With offices in Amsterdam and Antwerp, AAC is a leading Benelux mid-market buy-out firm, which has to-date completed 31 management buyouts. It targets opportunities for majority stakes in profitable, cash-generative companies headquartered in the Benelux. AAC’s deal size is typically between €10 and €150 million. AAC is a growth-oriented investor, with such companies in its portfolio as Verasol, Corilus, Lubbers Transport Group and Hobré Instruments. More info: www.aaccapital.com

FSN Capital V (“FSN Capital”) has signed an agreement to acquire a majority stake in Holmbergs Safety System Holding AB (“Holmbergs”, the “Company”), a leading global supplier of mission critical safety systems to the child safety seat industry. Existing management and current owners will re-invest alongside FSN Capital and continue to own a material stake in the Company.

The Company has shown strong performance in recent years and established a global platform for continued expansion and holds a reputation for leading quality and engineering capabilities. The underlying child safety seat market is fast-growing and supported by favourable structural growth drivers such as stricter safety regulations and increased safety awareness.

Holmbergs is a joint global market leader in the fast-growing niche market of safety products and systems to the child safety seat industry. During the twelve months period ending on 30th April 2017 Holmbergs reported sales of SEK 316m and the Company has generated an organic sales CAGR of 18.5% 2014-2016. In partnership with FSN Capital, Holmbergs aspires to reinforce its strong market position and further accelerate international growth, primarily in Asia. Additionally, the Company intends to grow its adjacent secured transportation business, through both organic and inorganic initiatives.

“We are impressed by Holmbergs’ development over the last years and we are excited about the Company’s significant organic and inorganic growth potential. Holmbergs’ position as a market leader in a global niche market, supported by strong structural growth drivers, represents an attractive investment opportunity for FSN Capital and we are eager to support Holmbergs’ management team in the Company’s next growth journey”, says Marcus Egelstig, Principal at FSN Capital AB, acting as adviser to FSN Capital.

“It has been an exciting journey since I joined Holmbergs in 2008. We have successfully created a strong operational footprint with a joint leading position in all key markets and have consistently enjoyed double-digit growth with increasing profitability. We are recognized by our customers as a quality supplier in a market with strong underlying growth and is eager to continue the development together with our new principal owner FSN Capital”, says Anders Sandell, CEO of Holmbergs.

“The board is very proud of what the management team has achieved with the Company. Holmbergs has performed extremely well in all core markets and introduced new products, won new customers and continues to drive innovation forward. With a clear strategy for continued profitable growth, I am excited to continue to work with the Company under the FSN Capital ownership”, says Mikael Hägg, Chairman of the Board of Holmbergs.

FSN Capital was advised by White & Case, EY and Bain & Company. Financing is provided by Danske Bank.

• Twelfth realisation from HgCapital 6 Fund, delivering a 3.5x investment multiple and 30% IRR
• HgCapital has returned over £1.2 billion to clients over the last twelve months with seven exits and multiple portfolio refinancings since the Brexit vote
• Second realisation by HgCapital’s Munich team over the last 6 months, delivering an overall investment multiple of 2.7x / gross IRR of 32%.  This follows the new investments in Raet and STP completed in 2016

26 April 2017: HgCapital is pleased to announce that it has agreed the sale of QUNDIS, a leading provider of sub-metering solutions in Europe, to a German investment group around KALORIMETA (“KALO”), a leading service providers for climate-intelligent solutions in the buildings sector. Furthermore, HgCapital will retain a minority position in the combined group.

HgCapital initially invested in QUNDIS in May 2012. Headquartered in Germany, QUNDIS was created in 2008 from the merger of QVEDIS (previously part of Siemens) and KUNDO SystemTechnik and currently has more than 250 employees. QUNDIS supplies a comprehensive range of sub-metering and communication devices used to measure, collect and transmit accurate consumption data for heat and water usage at the household unit level, serving the SME independent sub-metering supplier and building technology markets across Europe. QUNDIS’ products are sold in over 30 countries, with the largest markets being Germany and Italy.

Key value drivers during HgCapital’s investment period have been the consolidation of Qundis’ production facilities into a single new state-of-the-art site in 2013, and the development of a highly-advanced gateway and software solutions to offer a comprehensive, market-leading remote read-out solution. Through its technological leadership and reputation as quality leader, QUNDIS has been able to develop further into new customer segments and service offerings on a truly European scale. QUNDIS’ growth also continues to benefit from broader market fundamentals such as the mandatory actual consumption-based billing (under the European Energy Directive), which HgCapital identified as a driver when the initial investment was made. Overall, QUNDIS is a great example of tech-enablement transforming a business.

The realisation of QUNDIS represents the twelfth exit from HgCapital 6 (2009), which has now delivered overall realised returns of 2.3x and a 24% gross IRR. The Fund has returned in cash 120% of the original investment made. The sale follows the successful exit of Zenith announced in January earlier this year, which returned 2.9x / 47% gross IRR, and a number of further realisations from HgCapital 6 are anticipated over the coming months.

The sale of QUNDIS’ continues HgCapital’s strong 20-year long track record of investing in hidden champions in the German market, across the Industrials, Services and TMT sectors. The Munich-based HgCapital team have seen significant activity over the past twelve months including the exit from P&I announced in September last year (which returned 2.3x / 37% gross IRR), as well as the new investments in Raet and STP.

Justin von Simson, Managing Partner HgCapital, and Head of HgCapital’s Munich Office, said: “We are very pleased to have achieved an outstanding result for our clients and furthermore to have identified KALORIMETA group as a strong partner for QUNDIS. We are also excited by the opportunity to continue to work with the existing businesses of the group in the future to build a leading company in the field of intelligent buildings and climate control. We would like to thank the management and employees of QUNDIS for their outstanding work and effort to achieve this outcome”.

Dieter Berndt, CEO at QUNDIS commented: “We very much look forward to working within the new partnership, as we see multiple opportunities for further improving and completing our solution offering. It is our strong conviction that the combination will allow both companies to benefit strongly from their respective expertise and enables us to have an even more attractive value proposition for all our customers”.

Jan-Christoph Maiwaldt, CEO at KALORIMETA commented “This acquisition is another milestone in the company’s digital transformation. My colleague Andreas Göppel and I are very pleased that we have successfully completed the acquisition. We´re now able to offer all parts of the value chain around the subject of smart sub metering and smart building individually or as a full service all over Europe.”

HgCapital were advised by Rothschild, Latham and Watkins, Deloitte, and E&Y