The European arm of private equity firm H.I.G. Capital has acquired German recycling company Der Grune Punkt-Duales System Deutschland from buyout shop Kohlberg Kravis Roberts & Co. H.I.G. Europe is investing alongside a group of private investors.Financial terms of the deal were not released. Kohlberg Kravis Roberts & Co. acquired the Cologne-based recycling company in January 2005.
H.I.G. Europe, the European arm of global private equity investment firm H.I.G. Capital, announced that funds advised by H.I.G. European Capital Partners LLP have made a significant investment in Der Grune Punkt — Duales System Deutschland GmbH, a leading German recycling company.
Based in Cologne, Germany, Der Grune Punkt — Duales System Deutschland GmbH (“DSD”) is the pioneer and market leader in take-back recycling systems. This includes close-to-home collection and recovery of consumer and transport packaging materials, as well as eco-friendly, cost-efficient recycling of used electrical equipment and facility waste disposal services. DSD is also one of Europe’s largest raw materials trading companies. In 2010, DSD generated revenues of over EUR600 million.
H.I.G. Europe is backing DSD’s management team and investing alongside a group of private investors, represented by Philippe von Stauffenberg of Solidus Partners who is also taking the position of executive chairman. H.I.G. Europe and the investor group are acquiring the company from Kohlberg Kravis Roberts & Co which acquired DSD in January 2005 and transformed the retail- and industry sector-sponsored non-profit organisation into a private sector company operating in a deregulated market. Together with its new investors, DSD’s management team plans to expand the Company’s recycling platform throughout Europe and expand into complementary environmentally friendly services.
Matthias Allgaier, Managing Director at H.I.G. Europe, commented:
“DSD has an outstanding management team and is a pioneer in development of leading recycling solutions. We are excited to back DSD to expand its geographic footprint and grow its product offering into adjacent environmentally friendly services. We view this investment as an excellent example of H.I.G. working closely with management teams to grow internationally and develop new markets and product lines.”
Stefan Schreiter, CEO of DSD, said:
“DSD has successfully transformed itself into a private sector company and a leading player in the dual system market. My management board colleagues and I remain committed to ensuring continuity for our clients and employees. Together with our new partners, we are looking forward to continuing the successful development of DSD in our new role as owner-entrepreneurs.”
Philippe von Stauffenberg added:
“We believe that DSD has great potential — not only in Germany. With the strong Der Grune Punkt brand and together with the management team, we will embark on a growth strategy over the next few years. As the leader in the dual system market, DSD has a strong client base with some 18,000 environmentally aware customers. We want to further expand this platform in Europe and develop additional “green services” with a focus on sustainability and environmental protection for both existing and new clients. We believe that together with H.I.G.’s pan-European presence and resources, we will be well positioned to achieve these goals.”
The DSD investment marks H.I.G. Europe’s ninth new deal investment in the last 12 months. With a full pipeline of activity, H.I.G. Europe expects to make further deal announcements in the coming months.
Der Grune Punkt — Duales System Deutschland GmbH (DSD) organises collection, sorting and recycling of waste packaging in Germany, co-operating with and working in parallel to municipal waste collection. DSD was founded in 1991 as Germany’s first dual system and remains a leading provider of take-back systems. The company is headquartered in Cologne, with additional offices in Berlin, Norderstedt and Augsburg.
In 1990, the German government enacted the German Packaging Ordinance that requires industrial firms and retailers to take-back and recycle all transport and product packaging materials. In response, a consortium of major retailers and manufacturers formed DSD as a jointly funded solution to meet the requirements of the German Packaging Ordinance. DSD established a second (dual) disposal system in parallel to the public-sector waste disposal service. As the first system of its kind worldwide, it has since 1991 been providing nationwide collection and processing of used packaging materials like yoghurt cups, glass bottles or beverage cartons from which DSD obtains raw materials, which it then resells on the open market, thereby forming a closed-loop recycling system.
About H.I.G. Capital:
H.I.G. Capital is a leading global private equity investment firm with more than EUR7 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, New York, and San Francisco in the U.S., as well as affiliate offices in London, Hamburg and Paris in Europe, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed manufacturing or service businesses. Since its founding in 1993, H.I.G. invested in and managed more than 200 companies worldwide. The firm’s current portfolio includes more than 50 companies with combined revenues in excess of EUR 6 billion. For more information, please refer to the H.I.G. website at www.higcapital.com.