By: Bill Bregar
September 20, 2012
MUNICH (Sept. 20, 11:35 a.m. ET) — Reuters is reporting that an undisclosed Chinese machinery group is poised to buy KraussMaffei Group from Madison Capital Partners, a Chicago-based investment firm.
Reuters cited “two people close to the transaction” who were not identified in its Sept. 20 story.
The news service does not name the possible Chinese buyer, but lists three Chinese companies that were “initially interested” but are no longer are in talks with Madison Capital: major plastics machinery players Haitian International Holdings Ltd. and Chen Hsong Holdings Ltd., and a third company, called Long Hong.
Munich-based KraussMaffei Group employs 4,000 people worldwide, building injection molding machines, extruders and reaction injection molding machines. The group makes well-known brands of KraussMaffei, Berstorff and Netstal. KraussMaffei Group generated record order income of 1.1 billion euros ($1.5 billion) for its fiscal year 2010-2011, ended September 30, 2011. Financial results are not available for this fiscal year.
Reuters reported that Madison Capital hopes to get as much as 700 million euros ($910 million) for KraussMaffei Group. That is the same figure Bloomberg reported in a story three months ago.
Madison Capital said it has retained Goldman Sachs.
Madison Capital bought the plastics machinery group — the world’s largest manufacturer of plastics equipment — in 2006. That’s six years ago, a fairly long time for private equity ownership, which has prompted industry observers to wonder when Madison Capital would cash out and sell KM Group, to pay back investors. Machinery sales are rebounding from the Great Recession and capital is freeing up for deals.
Contacted about the Reuters report, KM spokesman Imre Szerdahelyi said company officials “don’t comment on rumors.”
KM and Madison Capital officials also have declined to comment on past reports.
A German financial newspaper reported in 2008 that Madison Capital was preparing KM Group for an initial public offering. In mid-June of this year, Bloomberg reported that Madison Capital was exploring the sale of KraussMaffei Group, again citing undisclosed sources.