Finatem Current News

February 2008 edition

Finatem sells MBB Liftsystems AG to the
Austria-based Palfinger Group

MBB Liftsystems AG, Ganderkesee (MBB), previously held by financial and private investors, was acquired, under Finatem's management, by the Austrian listed company Palfinger Group in late 2007. MBB Liftsystems AG is one of the world's leading manufacturers of hydraulic tail lifts for the truck trailer market, as well as hydraulic access systems for passenger transport. In the 2007 financial year, the MBB Group generated annual sales of € 65 million.

In 2001, Finatem invested in MBB as a minority shareholder together with Natexis Industrie (now iXEN), Paris, in order to support MBB's majority shareholders and management board, providing growth capital for their international expansion strategy. At the investment time, MBB had been generating annual sales of € 48 million. After a difficult start in the US market and a failed acquisition in France, MBB suffered substantial losses between 2001 and 2004.

The minority shareholders Finatem and iXEN at the time reacted to the resulting financial imbalance by improving the balance sheet structure through a capital increase and by securing the cash-flow, thus becoming majority shareholders. As a majority shareholder in conjunction with iXEN, Finatem nominated Mr. Fritz Wilhelm Krüger (partner at Finatem) as CEO of the Group's Management Board. Mr. Klaus Bax, also a Partner at Finatem, became chairman of MBB's supervisory board.

Yves Roucaud
President of iXen
Although the financial imbalance was mainly caused by the problems in France«, Mr. Yves Rocaud, president of iXEN says that »all management decisions of the new leading team were taken exclusively in Germany. From Paris, we could not and did not want to influence decisions for which MBB's company representatives were solely responsible. We were extremely fortunate to have Finatem as a local co-investor with extensive experience in the German midmarket, as they ultimately initiated the turn-around process.

Mr. Krüger was the sole member of the management board, and under his guidance extensive measures were taken in order to optimize the company's business model (procurement, production, logistics) and expand its international business, particularly its US subsidiary, leading to a strong increase in sales and revenue situation in all product fields and sales regions.

Fritz-Wilhelm Krüger
Sole member of MBB's
management board
Converting a French production company located in the Normandy region into a strongly downsized distribution company by far exceeded my experience in restructuring German companies as regards costs and personal input«, Mr. Krüger recalled his first months at MBB: »Ultimately, by setting a clear course, we were able to enforce the initial decisions and retained the French market. At the same time, we had to strike a new path within the whole company, with successful results thanks to our exceptional team in Ganderkesee and the financial support of our shareholders Finatem and iXEN.

Klaus Bax
Chairman of MBB's
Supervisory Board

The strategic course was set in spite of the difficult situation in the European core markets of MBB«, says Mr. Bax, chairman of the supervisory board. »In addition, the management succeeded in reaching high growth rates in the US market through another increase in capital stock provided by the new majority shareholders, before the weak dollar made business dealings between the US and Europe more difficult.

As a consequence, many potential buyers, i.e. not only renowned industrial companies but also financial investors, were attracted by the company's distinctly improved market share in Europe and the US.

With the Austria-based Palfinger Group as a strong partner, the company will be granted additional access to markets unserved so far, as well as further growth potential, based on Palfinger's international sales and client structure.

Christophe Hemmerle
Finatem's managing partner
The company's growth potential in the US was heavily affected by the US dollar development«, says Christophe Hemmerle, Finatem's managing partner. »In order to avoid expensive supplies from Europe, we had to decide whether we should build up production sites in the US or Mexico, meaning that again we would have to finance considerable investments. Potential investors in the market were highly interested, and this not only provided an attractive purchase price for the seller, but also another excellent opportunity for MBB to grow. Palfinger, which is already actively involved with other hydraulic lifting, loading and handling systems, e.g. mobile cranes in similar market segments all over the world, will now be able to provide excellent support not only in the sales field, but also in the procurement field.

Irmgard Schade
partner at Finatem
Irmgard Schade, a partner at Finatem, reports: »In the course of negotiations with various investors, those with Palfinger were the most convincing. Together with MBB's senior and middle management, we were convinced of the Palfinger Group's clear, long-term strategy for this segment. We were especially pleased with Palfinger's clear statement as regards the Ganderkesee location. In the future, this will be the centre of the Group's entire lifting platform activities. This represents a 'win-win' situation which was essential to the decision process.

Finatem - The company and its activities

Finatem was founded in 2000 and is one of the most active independent players in the small mid cap market in Germany. The team consists of six professionals, all based in Frankfurt. They are backed by five industry advisers with extensive experience in managing, buying and selling German companies.

Finatem's strategy is to focus on companies in traditional industries with their core operations in German speaking countries. It more specifically looks for majority stakes in leveraged buy-outs, where the operational experience of its Partners can be applied. Targeted deal size is between € 25 million to € 125 million in sales and/or enterprise value.

Finatem Fonds II Management GmbH & Co. KG
Freiherr-vom-Stein-Straße 7, 60323 Frankfurt/Main, Germany
Commercial register court: Frankfurt/Main Local Court, HRA 31142

Personally liable partner: Finatem Fonds II Management Verwaltungs GmbH
Freiherr-vom-Stein-Straße 7, 60323 Frankfurt/Main, Germany
Managing Partners: Christophe Hemmerle, Dr. Robert Hennigs
Commercial register court: Frankfurt/Main Local Court
Company registration number: HRB 57281