EQUITA closes fundraising for the EQUITA GmbH & Co. Fonds 3 KGaA with a total volume of €315m – Open-ended structure enables also longerterm investment strategies – Widespread acceptance among private investors and their family offices endorses the investor’s entrepreneurial approach
Equita Management GmbH (EQUITA), the Bad Homburgbased private equity company of the Harald Quandt Group, today announced final closing of the third of the private equity funds to which it acts as adviser. Established in autumn 2005 as a commercial partnership limited by shares (“KGaA”), the fund closed with a total volume of €315m, clearly exceeding the original target of €250m. Inclusive of the co-investments made by its investors, the Equita Fonds 3 KGaA now has equity of more than €400m to invest.
When launching the Equita GmbH & Co. Fonds 3 KGaA, EQUITA consciously opted for an open-ended structure, i.e. an unlimited investment timeframe, with a view to embodying the entrepreneurial traditions pursued by the Harald Quandt family, in which the capital made available by investors is invested on a long-term basis. Furthermore, the chosen form of legal entity (“KGaA”) and the defined investment criteria facilitate a broad spectrum of different investment types, ranging from management buy-outs of group subsidiaries/spin-offs through to the resolution of succession issues in family-owned companies or long-term investment in profitable midsized companies. In all instances, the focus is on the task of furnishing companies with a solid equity base as a platform on which to realize growth scenarios.
With a total of 65 investors – all of them wealthy private investors and their family offices as well as selected institutional investors – the number of partners investing in its third investment vehicle has been considerably expanded and diversified. The greatest acceptance for the chosen concept was, with a share of some 60%, to be found among entrepreneurs and their family offices, which is an impressive endorsement of the entrepreneurial approach pursued by EQUITA. Around a sixth of the fund volume was provided by insurance companies, 8% by banks and their private equity vehicles, trusts accounting for a further 8%, and pension funds for approx. 6%. The management, together with individual members of the EQUITA supervisory board and investment committee, hold more than 3% of the fund volume.
Equita Management GmbH specializes in complex transactions involving the acquisition of midsized companies in the German-speaking countries. As in the case of the earlier Equita funds, the current holding again invests in companies with significant growth potentials in mature industries. There is, however, no sectoral bias. The focus is on investments in companies with sales revenues in the €50m to €250m bracket. The overriding objective is, in all cases, the consistently earnings-driven evolution of companies and the achievement of corresponding corporate value enhancements. To this end, EQUITA uses both its own equity as well as debt capital, yet great care is taken to ensure that leveraging levels do not impede the implementation of growth strategies at portfolio companies. Equity of up to €50m is made available for each individual investment.
EQUITA works together on partnership-based terms with the respective company’s management, which generally acquires a share in its own company, and any other owners. With a team of ten investment professionals, EQUITA holds wide-ranging experience in the provision of support for the completion of succession issues, group spin-offs, growth financing transactions, and management buy-outs.
Following the first significant commitments of capital by investors, further fundraising activities were temporarily suspended in favour of a review of possible acquisition targets. In the course of 2006, EQUITA received more than 130 offers – the highest figure in the history of the company – detailing the profiles of relevant companies to be examined and considered as possible acquisition targets. Following the first-stage review of more than 60 scenarios and in-depth scrutiny of eleven, five projects were presented to the investment committee, all of which were approved. Equita Fonds 3 KGaA was, in fact, able to make four investments during the course of 2006, with the fifth having followed in spring of 2007. The first acquisitions include majority stakes in Barat Carbide Holding, Barat Ceramics Holding, and Z&J Technologies GmbH (all made in April 2006). In October of last year, PMA Holding was acquired. The acquisition of Stromag Group has been completed as of end of April.
Commenting on the final closing of Equita Fonds 3 KGaA, Dr. Michael Hönig, managing partner at Equita Management GmbH, stated: “We are delighted by the great interest investors have shown in our chosen structure, which serves a vehicle for the sustained implementation of the entrepreneurial approach pursued by the Harald Quandt Holding. With our new fund, we are ideally positioned to meet both the current demands of the investment and private equity markets and the expectations of midsized companies, also with respect to long-term reliability and consistency. Our new open-ended investment vehicle, with its unlimited investment horizon, creates greater flexibility by removing any pressure there might otherwise have been on us to dispose of portfolio companies in the coming years. The Equita Fonds 3 KGaA will continue the successful investment strategy of the earlier funds by offering midsized companies in Germany, Austria and Switzerland the strategic know-how and the financial strength they require when implementing their growth scenarios.”
Notes for editors:
Equita Management GmbH Equita Management GmbH (“EQUITA”) is an independent, non-bank-affiliated private equity company based in Bad Homburg which, through the vehicle of funds managed exclusively in-house, invests in midsized companies in the German-speaking countries. EQUITA, which grew out of the business activities of the Harald Quandt family, generally acquires majority stakes in companies offering significant growth and value enhancement potentials. Current investments are being made from the new vehicle, the Equita Fonds 3 KGaA, which closed in spring of 2007 after raising a total fund volume of €315m. An openended fund with no fixed investment timeframe, the Equita Fonds 3 KGaA is an ideal vehicle for longer-term investment strategies. In total, EQUITA currently manages three private equity funds with equity in excess of €500m. Since 1992, 19 companies have been acquired, with nine of these having subsequently been divested. The ten companies currently in the portfolio have a combined workforce of some 6,600 and aggregate sales revenues of close on €800m. Further information is available on the company website at www.Equita.de.
Further information:
Equita Management GmbH, Bad Homburg v.d.H.
Dr. Michael Hönig, Managing Partner
Hans Moock, Managing Director
Dr. Hansjörg Schnabel, Managing Director
Telephone: +49 (0) 6172 9441-0
On behalf of Equita Management GmbH:
Charles Barker Corporate Communications GmbH, Frankfurt am Main
Irina Kobboldt, Telephone: +49 (0) 69 794090-16
Kornelia Spodzieja, Telephone: +49 (0) 69 794090-0
