Deutsche Beteiligungs AG will divest three quarters of its shares in Romaco Group, a mechanical engineering company to the Truking Group. No financial terms were disclosed. At the close of the deal, DBAG will hold a 24.9 percent stake in Romaco.
Frankfurt am Main, 2 May 2017. Deutsche Beteiligungs AG (DBAG) will successfully conclude its investment in the Romaco Group (Romaco) and initially divest three quarters of its shares in this mechanical engineering company to a strategic buyer, DBAG announced today. The new owner is the Truking Group, a leading China-based engineering company, whose founder holds a majority stake after floating parts of the group on the stock exchange. The DBAG-managed DBAG Fund V will also divest a proportionate share of its holding, so that a 24.9 percent interest will initially still be held by DBAG and DBAG Fund V. These remaining shares will be transferred within the next three years, enabling DBAG and DBAG Fund V to support Romaco’s transition to its new owner. Agreements to that end were signed Friday; their completion is subject to regulatory approval.
DBAG and DBAG Fund V acquired Romaco in April 2011 and will now successfully end their engagement. The sales price corresponds to more than twice the original investment. The interest held by DBAG exceeds its valuation in the Company’s IFRS-formatted accounts at 31 December 2016; the sale has therefore resulted in an income contribution of approximately six million euros in the second quarter of 2016/2017 (ended 31 March 2017).
Romaco (www.romaco.com) is a globally leading specialist provider in processing and packaging technology. The company designs and manufactures system solutions largely for the pharmaceutical market. Romaco focuses on the strongly growing segment of technically sophisticated flexible machines that can be retooled quickly and easily for different products. Its customers include globally operating drug manufacturers and generics companies. Romaco employs a staff of 550 at its headquarters and seven other sites. In its 2015/2016 financial year (ended 31 October), the company generated revenues of 134 million euros.
At the outset of the investment, the strategic objective was to develop Romaco to become a full liner able to provide system solutions for its customers that cover the complete range of tablet production and packaging processes. That objective has been reached – to which a number of add-on acquisitions have contributed. In addition, Romaco has expanded its service business and enlarged its geographical reach. Today, Romaco is present with own sites in the US, China, Brazil, France and Russia.
“Romaco has clearly moved forward in recent years, and the sale successfully concludes that strategic development,” said Dr Rolf Scheffels, member of the Board of Management of Deutsche Beteiligungs AG. “Romaco can now seize the opportunities inherent in its improved market position in Asia. We are delighted to be in a position to participate in this step, too.”
Paolo Alexandre, CEO of Romaco, underscored the advantages for the company under its new majority owner: “Our products and our geographical presence ideally complement the business of our new owner Truking – there is no overlap. Romaco will now have markedly broader access to the promising Chinese market, which creates major opportunities for further growth.”
Truking was founded in 2000. The company manufactures machines and lines for the pharmaceutical and chemical industries, including packaging machines. Truking employs a workforce of 2,600 in China. Romaco is the company’s first investment in Europe.
Deutsche Beteiligungs AG, a listed private equity company, initiates closed-end private equity funds and invests alongside the DBAG funds in well-positioned mid-sized companies with potential for development. DBAG focuses on industrial sectors in which Germany’s ‘Mittelstand’ is particularly strong on an international comparison. With its experience, expertise and equity, DBAG supports the portfolio companies in implementing corporate strategies that sustainably create value. Its entrepreneurial approach to investing has made DBAG a sought-after investment partner in the German-speaking world. Assets under management or advisement by the DBAG Group amount to approximately 1.8 billion euros.