Germany-based private equity firm Deutsche Beteiligungs AG (DBAG) has agreed to invest in the management buyout of German industrial business firm Pfaudler Process Solutions Group, which operates in India through GMM Pfaudler Limited, as per a stock market disclosure.
DBAG and DBAG Fund VI will initially acquire the group completely from US-based National Oilwell Varco Inc (NOV), after which its management is expected to co-invest in a management buyout (MBO), the company said in the statement.
DBAG will invest €8 million from its balance sheet to finance the spinout. The completion of the transaction is subject to regulatory approvals.
“In Pfaudler, we will once again invest in a quality company operating in a global niche market," said Torsten Grede, spokesperson of the Board of Management at DBAG.
"With our support, that business is to be expanded companies—as has been done in the past at other mechanical engineering companies in the portfolio. The potential for increasing investment in capital goods in Asia is another factor in favour of our investment in Pfaudler," Grede added.
Pfaudler Process is a manufacturer of glass lined as well as fluoropolymer reactors and components for the chemical and pharmaceutical industries. In 2014, Pfaudler expects to clock revenues of around $200 million.
“Greater autonomy, which DBAG's investment will provide, will allow us to exploit the potential inherent in our business to an even greater extent than in the past,” Andrew Will, CEO of Pfaudler Process Solutions Group, said.
DBAG is a public investment firm specialising in management buyout and late stage transactions of middle market companies. Pfaudler transaction is DBAG's second MBO in the past four weeks. Last month, it had invested in Huhtamaki Films.
Pfaudler operates in India through GMM Pfaudler Limited (formerly Gujarat Machinery Manufacturers).
GMM Pfaudler was founded n 1962 as Gujarat Machinery Manufacturers (GMM) and got listed on the Bombay Stock exchange. In 1987, US-based Pfaudler Inc subscribed to 40 per cent to form a joint venture and further raised its stake to 51 per cent in 1999. The company was then renamed as GMM Pfaudler Limited.
(Edited by Joby Puthuparampil Johnson)