MUNICH, GERMANY (Updated June 22, 12:35 p.m. ET) — Bloomberg is reporting that Madison Capital Partners is exploring the sale of KraussMaffei Group, the world's largest manufacturer of plastics equipment.
Bloomberg reported the story June 19, citing people familiar with the matter, which the global news service did not identify.
Munich-based KraussMaffei Group generated record order income of 1.1 billion euros ($1.5 billion) for its fiscal year ended Sept. 30. The group employs about 4,000 worldwide, making injection presses, extruders and reaction injection molding machines.
Larry Gies, president and CEO of Chicago-based investment firm Madison Capital Partners, did not return telephone calls for this story. Contacted by telephone after the story came out, KM spokesman Imre Szerdahelyi said the company would have no comment. Karlheinz Bourdon, the machinery group's vice president of technologies, had “no comment” when asked about the report at a conference in
In recent years, private equity ownership has swept through the plastics machinery sector. Private equity firms pool investment money to buy companies, and then later try to sell for a higher amount.
Madison Capital bought the plastics machinery group, at the time called Mannesmann Plastics Machinery GmbH, in mid-2006. It included some of the plastics industry's best-known brands: KraussMaffei, Netstal, Berstorff and Demag Plastics Group (which was later sold).
Madison Capital purchased the machinery group from Kohlberg Kravis Roberts & Co. of
Now Bloomberg is reporting that one of its sources is saying initial assessments show that KraussMaffei Group could sell for as much as 700 million euros ($885 million). The source told Bloomberg that Goldman Sachs Group Inc. has sent out information to potential bidders, including private equity funds and industry buyers.
Would Milacron LLC — one strategic player — be interested?
“They have a heavy European employment base, which makes them challenging from an acquisition perspective, due to the stringent employment regulations in
This is not the first time the tight-lipped Madison Capital has looked to cash out of the KraussMaffei Group. In 2008,
If Madison Capital did indeed want to sell KM fairly quickly after buying it, the timing was bad. The Great Recession was a double whammy for mergers and acquisitions, drying up machinery sales and making it harder to access capital.
But after crashing in 2009, the global machinery market bounced back sharply in 2010. It has continued the rebound.
And under six years of ownership by Madison Capital, KraussMaffei has done restructuring. In 2007, a year after buying the machinery business,
Straub left KraussMaffei Group last fall. He was replaced by Jan Siebert.
In April, longtime Netstal President and CEO Bernhard Merki departed in a corporate reshuffling, as KM Group was pooling the engineering and machinery development efforts of Netstal and KraussMaffei-brand equipment, and merging the marketing functions of Netstal and the KM-brand PET preform molding press business.
European Plastics News correspondent David Vink contributed to this report.