Adcuram Industriekapital AG, the German group that bought Battenfeld's injection press manufacturing operations, plans to return Battenfeld to a strong position in technology and marketing, according to Thomas Probst, chief executive officer.
Among the big decisions faced by Munich, Germany-based Adcuram: Will Battenfeld return to making large-tonnage presses, since the previous owner closed the big-press plant in Meinerzhagen, Germany?
In a deal announced Oct. 13, Adcuram bought Battenfeld Kunststoffmaschinen GmbH from SMS GmbH AG, an industrial conglomerate owned by Heinrich Weiss and his family. Terms were not disclosed.
The deal broke on the Friday before the Fakuma trade show, held Oct. 17-21 in Friedrichshafen, Germany. Probst and Dietmar Morwitzer, president and chief executive officer of the Battenfeld injection press business, outlined the future to trade press reporters on the first day of the show.
Battenfeld, with annual sales of more than 100 million euros ($125 million), builds presses in Kottingbrunn, Austria. The company employs about 620.
Adcuram likes to buy what Probst called ``corporate orphans,'' meaning units of larger manufacturing companies that are considered noncore by their parents.
``Our core is to develop underperforming assets, of course. There is no secret about that. So we were looking for [acquisitions] where we can develop businesses that are part of conglomerates,'' Probst said in a telephone interview after the show.
Probst termed Adcuram a strategic investor, as opposed to a financial investor, and said the firm usually owns companies for at least five years. Adcuram invests money from European families and institutional investors.
The new owners hope to have Battenfeld reach 5 percent earnings before interest and taxes, within the next few years.
The corporate-orphan moniker certainly fits Battenfeld Kunststoffmaschinen. SMS, based in Dusseldorf, Germany, has major holdings in equipment for steel mills, rolling mills and technology for metal tubing. In plastics, SMS continues to own extrusion brands of American Maplan, Cincinnati and Battenfeld Gloucester, plus major holdings in steel mill equipment. But the injection press-making segment fell out of favor, as Weiss called for a ``radical restructuring.''
SMS tried to sell the business in 1999 to Madison Capital Partners of Chicago. But the deal soon fell apart.
Then last year, in November, Weiss swung the ax, announcing the closing of an injection press factory in Meinerzhagen, after what Weiss said were ``high losses for many years in a row.'' Meinerzhagen could make presses with clamping forces exceeding 2,000 tons. It was the site of Battenfeld's high-profile development of large-tonnage presses to mold polycarbonate window glazing for cars.
Battenfeld's remaining press factory, in Kottingbrunn, makes machines as large as 715 tons.
Probst said ``turnaround'' is not the right term to describe its plan for Battenfeld. Instead, Adcuram wants to bring the company ``back to the technology and market position of the past,'' he said.
He said Adcuram is studying the big-press issue. But Battenfeld is about more than large machines, he said, citing the Microsystem line of micromolding presses and other machines such as multimaterial equipment.
``The market positioning won't be cost position, but will be technology and quality of the machines,'' Probst said. Historically, Battenfeld has been a leader, but the company needs stronger marketing and a renewed push around the world, he said. For example, the brand has a large installed base in Russia, but the company allowed that position to slip.
Battenfeld also has to get its message out better. ``We have to convince customers that we have the best solution in terms of productivity, reliability, availability, things like that,'' he said.
The injection press operation is Adcuram's second plastics machinery company. In mid-2004, it bought the Kautex blow molding machinery business, based in Bonn, Germany.
Kautex, which makes extrusion blow molding machines to produce industrial and automotive parts, also qualified as a corporate orphan. The Schaffhausen, Switzerland-based seller, SIG Holding Ltd., wanted to focus on its core business of beverage packaging.
Probst said Adcuram has invested heavily in research and development and new machinery technology at Kautex. The company's sales have increased more than 50 percent during the past three years, as most of the growth came from high-tech machines.
Battenfeld and Kautex will be run as separate businesses.
Adcuram will look for other acquisitions in plastics machinery, Probst said.
``The market is consolidating right now. ... I think there will be a lot of movement in the next two or three years,'' he said.