Aurelius Equity Opportunities SE & Co KGaA said June 28 that it agreed to sell Solidus Solutions to Centerbridge Partners LP for an enterprise value of about 330 million euros ($375.6 million). Solidus is a European producer of sustainable fibre-based packaging solutions for food, beverage & horticulture, consumer goods and industrial applications. Aurelius said it made 16x its money with the deal.
AURELIUS sells Solidus Solutions for EUR 330 million
• Largest exit in AURELIUS’ history
• Purchase price EUR 330 million (enterprise value), multiple on money invested of approx. 16x
• Approx. EUR 102 million positive effect on AURELIUS 2019 Group Earnings
• Successful transformation of Solidus Solutions into a global market leader in sustainable fibre-based packaging solutions
• Substantial growth under AURELIUS ownership through organic growth and strategic add-on acquisitions
• Underlying EBITDA growth from EUR 12.5 million on acquisition more than quadrupled in AURELIUS’ 4 years ownership
• Buyer, Centerbridge Partners L.P. sees significant opportunity for further growth
• Further exits expected for the upcoming months
Munich, June 28, 2019 – AURELIUS Equity Opportunities SE & Co. KGaA (ISIN: DE000A0JK2A8) has agreed to sell its subsidiary Solidus Solutions (“Solidus” or “the company”) tofunds advised by Centerbridge Partners L.P. for an enterprise value of approx. EUR 330 million. Solidus is the leading European producer of sustainable fibre-based packaging solutions for food, beverage & horticulture, consumer goods and industrial applications. The deal represents AURELIUS’ largest exit to date achieving a money multiple of approx. 16x over the 4 years of AURELIUS ownership. The transaction is subject to the approval of the competent antitrust authorities and consultation with the central works council of Solidus Solutions in the Netherlands which is expected to happen in Q3 2019. Its exit from Solidus will increase AURELIUS’ 2019 earnings by approx. EUR 102 million.
The investor of choice for non-core assets
AURELIUS acquired Solidus in 2015 as a carve out from listed Smurfit Kappa Group, which was looking to divest of its solidboard and graphicboard production mills, converters and sales offices across the Netherlands, Belgium and the UK. Whilst modestly profitable, the company was no longer core to Smurfit Kappa Group’s strategy. Solidus required immediate focus and investment to put the business onto a standalone basis and improve its performance.
With significant experience in the complex process of carving-out non-core divisions from multinational organisations, AURELIUS was the investor of choice. We were able to conduct the transaction quickly, taking over the business from its previous owner, rebranding it as Solidus Solutions and establishing the company as a standalone platform.
Successful transformation positioning Solidus for growth
After the acquisition, AURELIUS undertook immediate action to reposition Solidus business for growth. This included implanting operational experts into the business to implement the installation of new IT infrastructure and to establish new financial and legal internal structures. After this initial phase, AURELIUS commenced a comprehensive investment programme of EUR 60 million in total, which involved a restructuring to integrate the production mills and converting sites and establish shared services, a redesign of Solidus’ organisational structures and processes, and a reduction of costs across the business to improve its price competitiveness. AURELIUS also supplemented the existing management team with new professionals with considerable leadership experience. This hands-on transformation programme created a solid foundation for Solidus ahead of the next stage of its development.
Transformation through strategic acquisitions
The next phase in AURELIUS’ transformation of Solidus involved the significant expansion of its geographic footprint and operational efficiency through three strategic and highly synergistic acquisitions. In a 2-year period and with AURELIUS’ task force support, Solidus acquired and integrated Fibor Packaging in 2016, Abelan South in 2017 and Northern Paper Board in 2018, extending the company’s operations into France, Germany, Spain and UK, enhancing its sales by EUR 135 million and enabling it to become a truly Pan-European operator. These acquisitions facilitated significant operational synergies across the business, including supply chain optimisation, capacity utilisation and customer cross-selling.
Operational efficiencies and profit improvements
These synergies were further bolstered by a world class maintenance programme, which involved significant organic investment by AURELIUS into over 60 projects. These included upgrades and improvements to existing machinery and processes, targeted maintenance work to ensure efficiency of all machinery, the implementation of enhanced energy efficiency measures, a reduction in the costs of materials procurement, investment in automation and state-of-the-art machinery, new product innovation, and a review of the company’s operational and commercial activities.
Strong market potential
There is a strong and growing market opportunity for Solidus, as its recycled, fibre-based products have become a compelling alternative to plastic packaging and polystyrene products and the market for its luxury packaging continues to grow strongly. AURELIUS has supported Solidus in leveraging this opportunity to drive organic top-line growth through the development and implementation of a carefully targeted sales strategy, enabling Solidus to penetrate new markets including fruit and vegetables in France, Fish in the Nordic region and Horticulture in Germany.
This has resulted in the company achieving market-leading profit margins and growing adjusted EBITDA performance, which more than quadrupled from EUR 12.5 million on acquisition.
Market-leading Solidus well-positioned for continued growth
Today, Solidus is the leading fibre-based sustainable packaging producer in Europe. It operates from 15 locations across seven countries: the Netherlands, Belgium, France, Germany, Spain, Portugal and the UK, using state-of-the-art manufacturing capabilities to produce and convert a diverse range of solidboard, graphicboard and coreboard products, which it sells to customers across 70 countries, worldwide.
Solidus’ experienced management team, highly stable and long-standing customer base and new backing from Centerbridge Partners, provide the company with a strong foundation for future growth. In addition, the company has a strong pipeline of further strategic acquisition opportunities.
Dr. Dirk Markus, Group-CEO and Chairman of the Executive Board of AURELIUS, said: “This sale is the largest and most successful exit for AURELIUS to date, reflecting the significant effort placed into the business over the last four years. I would like to congratulate Solidus’ management under the superb leadership of Richard Houben and the members of the AURELIUS task force that we placed into the business, all of whom did an outstanding job.”
“Since our acquisition of Solidus, the AURELIUS task force team has provided hands on operational and M&A support to the company, transforming it from an unloved orphan business into an independent, pan-European operation and true market leader in its field, with significant growth potential. The success of this investment demonstrates the strength of AURELIUS’ niche expertise and capabilities in carving out peripheral, non-core assets from corporations and transforming them into successful and sustainable standalone businesses. With our portfolio maturing, we do expect further exits for the upcoming months.”
On this transaction, AURELIUS was advised by Rothschild & Co (M&A), Deloitte (Transaction Services), Jones Day (Legal), Ernst & Young (Tax) and Ramboll (Environmental).
AURELIUS Group is a pan-European investment group with offices in Munich, London, Stockholm, Madrid and Amsterdam. Since it was founded in 2006, AURELIUS has grown from a local turnaround investor to an international multi-asset manager.
AURELIUS Equity Opportunities SE & Co. KGaA (ISIN: DE000A0JK2A8,ticker symbol: AR4) represents the listed entity within the AURELIUS Group that focuses on investing in special and turnaround situations andmid-market transaction opportunities in a broad range of industries.AURELIUS Equity Opportunities currently has 21 portfolio companies located across Europe which employ around 15,000 people and generate annual revenues of approx. than EUR 3.8 billion. The shares of AURELIUS Equity Opportunities are traded on all German stock exchanges. The company’s market capitalization is approximately EUR 1.2 billion (as of June 2019).
The AURELIUS Group also operates in the areas of growth capital, real estate opportunities and debt. AURELIUS Growth Capital invests in successor solutions and spin-offs from larger mid-sized companies and corporate groups. AURELIUS Real Estate Opportunities focuses on real estate investments, particularly in projects with operational improvement potential, the value of which can be increased in the long-term by means of active management. AURELIUS Finance Company is an alternative direct lender, focused on providing debt solutions to small and mid-market firms across Europe. With its group charity AURELIUS Refugee Initiative e.V., AURELIUS provides comprehensive support for refugees on their way towards a better life.
To find out more, visit www.aureliusinvest.de.