Finatem Current News

June 2008 edition


Finatem sells Steudle Group to Management and Institutional Investors

Finatem has sold its interests in Pforzheim based Steudle group (Steudle) to its management and institutional investors.

Steudle is one of the leading manufacturers of electronic contact parts. The company's product portfolio comprises precision stamping and bending parts, plastic-metal compound parts, as well as complex component assemblies. Its client base includes reputable German and international manufacturers of electronic components for the automotive, mechanical engineering and white goods industries, and in 2007, Steudle generated sales worth € 32 million.

Finatem acquired Steudle in 2002. In a second step a minority holding was syndicated to Invest Equity, Vienna, Austria, and the management.

At the time of acquisition, Steudle was generating sales worth € 28 million. The company featured an excellent customer structure and was active in an attractive market segment with good growth potential. The Finatem team identified the need to optimize the existing sales structure, which contained too many products in an advanced life cycle, and in a subsidiary incurring losses. This implied both risk and considerable potential for the further development of the group.

Klaus Bax
Klaus Bax
Chairman of the Steudle group advisory board
The technical foundation as well as the client portfolio of Steudle were already excellent at the time when we came in«, comments Klaus Bax, a partner at Finatem and chairman of Steudle's advisory board, »however, there was a lack in structure and organization to transform existing know-how into profitable products promptly. The plastic coating subsidiary, which had been acquired by the former members, had a kind of 'life of its own' at the time of our commitment, without any visible integration in the group. Competitive thinking prevailed over the efforts to achieve common objectives.

When the markets in Eastern Europe opened up to global OEM clients, it was evident that the era of comparatively simple stamping and bending was going to be over. Further development into a second tier/development supplier was unavoidable in order to increase the group's value sustainably and secure jobs at Pforzheim in the long term.

Under the direction of Karl Schiga, Managing Director, and with the support of Klaus Bax, the product portfolio was consistently innovated to add high-value products between 2003 and 2004. Investment focused on the product segment "metal-plastic compound parts", where the expertise in the unique combination of metal and plastic helped Steudle to set itself clearly apart from competition and to establish unique selling points.

Karl Schiga
Karl Schiga
Managing director of
Steudle Group
The necessity of investing in new products and at the same time meeting our obligations to financing banks under an increasing margin pressure on "traditional" products initially represented a serious balancing act«, Karl Schiga remembers, »The pre-condition for this was a financing structure solidly oriented towards growth and expansion on the one hand, and to reliable banking partners on the other. In this respect, Finatem and Sparkasse Pforzheim represented an ideal solution.

In 2004, the first reference project in plastic-metal compound parts was successfully implemented with a reputable German group of companies. The project marked the breakthrough for the company in this new field of products.

Eric Jungblut
Eric Jungblut
Partner at Finatem
The strategic course was set despite difficult market conditions in Steudle's European key markets«, comments Eric Jungblut, responsible for the Steudle commitment at Finatem. »Right from the beginning, we consistently used the enterprise's resources for expanding promising product segments without losing sight of the yield situation and long-grown client relationships in traditional products. It was always our objective to create a balanced and, above all, profitable product portfolio.

The changeover in production to complex metal-plastic compound parts and assemblies simultaneously required the simultaneous and comprehensive re-organization of the group's controlling system. In this case, a controlling tool meeting Steudle's new direction was implemented, which had to satisfy both the shareholders' requirements and the company's needs.

Eric Jungblut
Eric Jungblut
Partner at Finatem
Controlling adjustment in the course of an ongoing investment process on the one hand and a new orientation of the company on both the product and manufacturing level on the other always requires considerable efforts for a company's management«, says Eric Jungblut. »The project was a big success which was only possible due to the close cooperation between the management, Finatem and our external consultant. The system has proven such a success that it is now used as a model for our portfolio companies.

The development of incoming new orders showed that the implemented strategy met the demands of Steudle's market. In 2005, the company recorded the highest number of incoming orders in the company's history. The new product segment in particular showed double-digit growth rates.

In 2007, a positive sales development and the target to further optimize the cost base led to the decision to consolidate the two manufacturing facilities at Pforzheim and Leingarten into one. The first stage of this investment project, whose magnitude was unique in the company's history, could successfully be implemented in early 2008 with continuous business operations.

Karl Schiga
Karl Schiga
Managing Director of
Steudle Group
The decision to agree to an extensive investment in a completely new production facility is the evidence of the high entrepreneurial orientation of our shareholders«, emphasizes Mr. Schiga. »Since 2008, Steudle group has one of the most advanced production facilities in the industry and hence the required capacy for continuous growth. Consolidation at one location has significantly improved our cost base. In addition, it represented a strong, positive signal for our staff and clients as regards our long-term commitment at Pforzheim.

Due to the successful development of the Steudle group, institutional and strategic investors increasingly became interested in acquiring it. The complete takeover of the group by its management and institutional investors means that the company has achieved and secured long-term independence in Pforzheim.

Christophe Hemmerle
Finatem's Managing Partner
We are very satisfied with the outcome of the transaction«, comments Christophe Hemmerle, Managing Partner at Finatem. »For the group and its staff, this sets the course for successful long-term development and growth at Pforzheim. For the investors in our first Finatem Fund, this is the evidence of our impressive investment philosophy and its correctness. This all the more, so as the transaction represents the successful realization of the Finatem's Fund I.




Finatem – The company and its activities

Finatem was established in 2000 and is one of the most active independent investment companies in the buy-out market for SMEs. The team comprises six investment professionals based in Frankfurt. They are supported by five industry experts with comprehensive expertise in the leadership, acquisition and divestiture of companies.

Finatem's focuses on traditional industries and companies with their main activities in the German-speaking countries. Finatem uses leveraged buy-out transactions to acquire companies in which the experience of Finatem's partners may be used to deliver growth. Generally, target companies have sales and company value ranging between € 25 million and 125 million.




www.finatem.de   info@finatem.de

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