HAMBURG/REGENSBURG – APRIL 24, 2017 – Funds advised by BC Partners (“BC Partners”), a leading private equity firm, have signed an agreement to sell SGB-SMIT Group (or “the Company”), the largest independent pure play manufacturer of transformers, to funds advised by One Equity Partners (OEP), a middle-market private equity firm. The agreement is subject to regulatory approval, works council consultation and other customary closing conditions, and is expected to be closed in the third quarter of 2017. Terms of the private transaction were not disclosed.
SGB-SMIT supplies power transformers to utilities, grid operators, renewable energy OEMs and industrial clients. Headquartered in Regensburg, Germany, its origins date back to 1900. Today, the Company is the leading medium-sized manufacturer of transformers in Europe, supplying customers worldwide from six production sites in Germany, the Netherlands, Romania, Malaysia and the U.S. Over the past three years, the Company managed to outgrow its market significantly, reaching €729 million in sales in 2016. With BC Partners’ support, SGB-SMIT Group invested over €150 million to further strengthen its platform and facilitate growth, including strategic add-on acquisitions and internationalization. Today, the Company has a total workforce of over 2,200 employees, an increase of over 1,000 employees since BC Partners originally invested.
SGB-SMIT clearly differentiates itself from conglomerates and regional challengers through its close proximity to customers in core markets, a strong focus on cost, and its ability to provide customized solutions on short lead times. These characteristics position the Company well with customers that have to cope with increasing electricity meet demand. In addition, SGB-SMIT benefits from growing maintenance and infrastructure replacement needs in developed markets due to new efficiency regulations and increased grid complexity.
Stefan Zuschke, Managing Partner of BC Partners, said "Through the hard work and dedication of SGB-SMIT’s management and workforce over recent years to expand and modernize existing factories, as well as to establish new locations including the US, Romania, Czech Republic, India and China and also invest in the workforce, we have created a successful and unique platform in the global transformer space. This also included continuous investment in the Companies highly skilled workforce. We are proud to be able to hand over such a well positioned and successfully growing business to SGB-SMIT’s new partners, One Equity Partners."
"With our strong operational performance, business growth and strengthened technology platform, we have laid the foundations for SGB-SMIT’s continued success. The dedication of our skilled workforce will allow us to continue expanding into new markets and deliver customer satisfaction. One Equity Partners will be the ideal partner for us to put our ambitious growth plans into action." said Jan Ölscher, CEO of SGB-SMIT.
"SGB-SMIT has repeatedly proven itself capable of delivering growth rates in excess of the market, and we look forward to working with management to build on this success to make SGB-SMIT a global leader through strategic, transformative combinations," said Johann-Melchior von Peter, Senior Managing Director at OEP. "The Company is uniquely situated to fully take advantage of the attractive and growing transformer market."
BC Partners is a leading international private equity firm with over €15 billion of assets under management. Established in 1986, BC Partners has played an active role in developing the European buy-out market for nearly three decades. BC Partners executives operate as an integrated team through the firm's offices in Europe and North America, acquiring and developing businesses to create value in partnership with management. Since inception, BC Partners has completed 93 investments in companies with a total enterprise value of €115 billion and is currently investing its tenth private equity fund. For more information, please visit www.bcpartners.com.
One Equity Partners is a middle-market private equity firm focused on the industrial, healthcare, and technology sectors in North America and Europe. The firm builds market-leading companies by identifying and executing transformative business combinations. One Equity is a trusted partner with a differentiated investment process, a broad and senior team, and an extensive track record generating long-term value for its partners. Since 2001, the firm has completed more than 140 transactions worldwide. One Equity, founded in 2001, spun out of JP Morgan in 2015. The firm has offices in New York, Chicago, and Frankfurt. For more information, please visit www.oneequity.com.