DBAG Acquires Two Engineering Groups

Deutsche Beteiligungs AG Unternehmensbeteiligungsgesellschaft (DBAG) this summer completed separate acquisitions of two German engineering businesses.

DS Technologie Werkzeugmaschinenbau was acquired from the liquidators of Drries Scharmann, its parent company. GAH Anlagentechnik, a listed company, was taken private via a buyout from its two major shareholders.

Mnchengladbach-based DS Technologie manufactures production-line equipment and processing centres for the transportation, aviation, space and power-supply industries, as well as for machine and tool construction in the automotive industry. The company’s products, sold under the Drries, Droop & Rein and Scharmann names, include vertical, horizontal and high-speed processing centres and gantry milling machines for the complete processing of large units. The company achieved a profit margin of some 5% on sales of DM210 million (ecu 106 million) in 1997 and was sold with an order book worth around DM220 million, enough to ensure that production will be running at full capacity well into 1999.

DBAG is acquiring approximately 97% of DT Technologie’s shares from the liquidator. On completion of the deal, management will increase its holding in DS Technologie to 15% from around 3%.

To take GAH Anlagentechnik private, DBAG acquired 97% of its shares from AGIV Aktiengesellschaft fur Industrie und Verkehrswesen, which owned 87% of the company and Energie Baden-Wurttemberg, which held 10%. The balance of the company’s shares were on free float. Small shareholders were offered the choice of exchanging their shares in GAH for shares in the newco or accepting a cash payment. DBAG invested a total of DM67 million (ecu 34 million) in the buyout, half off its own book and half via a parallel co-investment vehicle (story, page 8).

GAH, based in Heidelberg, is a market leader in energy and communications engineering and in facilities control and management technology. GAH recently implemented a successful restructuring programme with AGIV’s support, and returned to break-even in 1997, when it achieved sales of DM1.5 billion.

DBAG says the company is now well-positioned to take advantage of opportunities for growth both within Germany and in other markets, especially Eastern Europe, where energy supply facilities are in need of extensive modernisation.