Some of the former Mannesmann Plastics Machinery GmbH companies soon may have new owners. Japan's Sumitomo Heavy Industries Ltd. has expressed interest in buying sister companies Demag Ergotech and Van Dorn Demag, while Krauss Maffei AG reportedly is preparing to file an initial public offering.
Krauss Maffei and the Demag units currently are owned by Madison Capital Partners, a Chicago-based private equity firm.
News of the Sumitomo deal came from the German cartel office, which included the acquisition of Schwaig, Germany-based Demag Ergotech and Strongsville, Ohio-based Van Dorn Demag in a list of announced mergers Jan. 2. They make up Demag Plastics Group.
Sumitomo and Demag Plastics Group issued statements verifying the German report. Sumitomo said: ``Demag Plastics Group and Sumitomo Heavy Industries confirm that talks regarding the acquisition of Demag by Sumitomo have occurred. Additionally, anti-trust documents have been filed at the appropriate agencies. Although the transaction is not final, both parties strongly believe that the intended combination would greatly benefit customers with an excellent product portfolio, broad application experience and a global service organization.''
Demag Plastics Group spokesman Raik FlÃ¤mig also said DPG is talking with Sumitomo. He said it is normal procedure for a prospective buyer, early in the process, to file with the cartel office, which studies possible antitrust and other issues in deals involving German companies.
``We can confirm that we are in contact with Sumitomo, but it's too early to confirm that we are in further progress,'' FlÃ¤mig said.
Sumitomo's Plastics Machinery Division is based in Chiba City, Japan.
Company executives disclosed in October that Demag Plastics Group's injection press business was for sale. DPG already had been separated out of the machinery group.
FlÃ¤mig declined to say whether DPG officials are talking to other potential buyers. ``We are looking for a strategic investor, so we are open to everybody,'' he said Jan. 10.
Klaus Erkes, president and chief executive officer of DPG, was traveling and could not be reached for comment for this story.
Krauss Maffei, meanwhile, fueled speculation about a potential IPO when it revealed some limited data on its sales and profit for the most recent fiscal year, and when it converted the business from a limited company, or GmbH, to a joint stock company, or AG, in mid-December.
German newspaper Frankfurter Allgemeine Zeitung reported Jan. 5 that Munich-based KM might be planning an IPO. KM is now the umbrella company that includes the Krauss Maffei brands of injection molding machines, extruders and polyurethane processing machines, Netstal injection presses and Berstorff extruders.
The newspaper quoted CEO Dietmar Straub as saying, ``We do not comment on such speculation.''
However, the newspaper said Straub's remark that ``we have developed a new structure and achieved the prerequisites for the future'' was a further indication of a stock market launch.
Krauss Maffei spokesman Matthias Andreesen said the machinery group would have no comment.
KM reported that its 2007 sales rose 5 percent to 950 million euros ($1.4 billion) and profit climbed 40 percent to 71 million euros ($104.4 million).
Larry Gies, Madison Capital's president and CEO, did not return a telephone call seeking comment. Madison Capital has owned the plastics machinery group - the world's largest - since mid-2006, when it bought it from Kohlberg Kravis Roberts & Co. Under Madison Capital, the group has become more integrated, as executives discarded the ``multibrand'' strategy of past ownership that kept units as separate competitors.
Krauss Maffei officials are looking at an IPO late in the first quarter, according to a European machinery industry source who spoke on the condition he would not be identified.
Frankfurter Allgemeine Zeitung reported that if the IPO takes place, it will be one of the largest in the German stock market in 2008.
Meanwhile, Mannesmann Plastics Machinery recently signed a 113 million euro ($166.2 million) deal to sell and lease back its three German industrial sites, in Munich, Nuremberg and Hanover. Krauss Maffei's headquarters in Munich comprises two-thirds of the value of the deal. The buyer is Segro Real Estate Investment Trust, a Slough, England-based property investment and development company that buys and manages industrial sites.
Last summer, the machinery company struck a similar sale/lease-back deal in the United States, covering Krauss Maffei's U.S. headquarters in Florence, Ky. That industrial building sold for $6.65 million.
Plastics News Akron, Ohio-based senior reporter Bill Bregar and Guangzhou, China-based staff reporter Steve Toloken contributed to this story.