London-based Apax Partners & Co. Ventures Ltd. now owns the world's largest manufacturers of plastics machinery. An Apax official said the investment group could take Mannesmann Plastics Machinery AG public in a few years.
``Our preferred option would be an [initial public offering],'' said Renate Krummer, an Apax managing director based in Munich, Germany.
Krummer, who handles buyouts in Germany, would not rule out selling off part of the six-company group - or making an acquisition to bolster MPM.
Apax, which manages a portfolio valued at more than $10 billion on behalf of institutional investors around the world, announced the deal July 6. Based in Munich, MPM owns six companies that make some of the most familiar machinery in the plastics industry: Krauss-Maffei, Van Dorn Demag, Demag Ergotech, Netstal, Berstorff and Billion. The six suppliers generated $1.2 billion in 2000 sales. They employ 7,000 worldwide making injection molding machines, extruders and polyurethane processing equipment.
Apax beat out the other finalist, Investcorp, to win MPM. Published reports in Europe said the asking price was about 800 million euros, or $675 million - lower than what former owner Siemens AG expected because of the weakening market for plastics machinery. Both Apax and MPM declined to disclose the price.
Krummer said Apax runs the largest pool of private equity investment money in Europe, with $3.7 billion (4.4 billion euros) targeted toward acquisitions on the continent.
Apax will offer a group of MPM executives a stake in the company, including MPM Chairman Wolfgang Vogl, Krummer said in a July 6 telephone interview. Vogl will continue to be the top executive of the machinery maker, she said.
``The whole management team is obviously running it. We're a financial investor and we rely on the management to shape the company,'' she said.
Vogl was in meetings the day the deal was announced and not available for comment, his secretary said.
The sale is subject to approval from European authorities.
Krummer said MPM marks the first plastics-industry acquisition for Apax. The company does own other types of machinery makers, including one that builds paper processing equipment.
Vogl, in his public comments during the past two years, has stressed that the six MPM member firms are stronger running under a single umbrella company than they would be if broken apart.
Krummer seemed to agree - to a point. She said Apax prefers taking MPM public through an IPO. But she said it is too early to talk about when that might happen.
``It depends on the market. The market currently wouldn't take anything. The average would be sometime after three years or so,'' she said.
Apax would continue to be a major investor for one or two years after the IPO.
Apax does not always follow the IPO strategy on its investments. She said selling companies makes more sense in some businesses, such as health care.
Krummer said selling part of MPM is an option.
``As a financial investor, I think we are open to discuss anything that increases the value. Having said that, our strategy is to buy and build,'' she said.
Krummer added that Apax may use its cash stockpile to buy other machinery companies. A news release announcing the deal said Apax ``intends to expand the market position of MPM.''
``This has been our tradition, especially in European buyouts, to add on acquisitions,'' she said.
After its last two buyouts in Europe, she said, Apax made related acquisitions within three months of the original deal.
She said there are no deals pending. She declined to comment on news reports in Switzerland that Christoph Blocher, owner of Zurich, Switzerland-based nylon producer EMS-Chemie Holding AG, wants to buy one MPM member company, Swiss injection press maker Netstal-Maschinen AG. Blocher was not available for comment.
Apax will seek input on strategy from the MPM managers who become shareholders, she said.
