Private equity firm Deutsche Beteiligungs AG (DBAG) will acquire the film business of Finland-based plastics packaging group Huhtamäki Oyj for 141 million euros ($176.2 million) in a management buyout.
DBAG will hold 17 percent in Huhtamäki Films and invest up to 12.5 million euros ($15.6 million). The DBAG Fund VI and the company's management will hold the remaining shares.
The film division, which is headquartered in Forchheim, Germany, saw net sales of more than 187 million euros ($252.8 million) in 2013. In July, its Espoo, Finland-based parent company announced that it was looking to divest from the segment to focus more on food packaging.
DBAG was interested. The firm looks for well-positioned, mid-size companies and it sees Huhtamäki Films as a specialized enterprise that collaborates closely with customers to develop and produce plastics-based liners and films for hygiene and health products, the construction industry, and adhesive tapes and labels. Sales are pretty evenly divided among the three areas of application.
About 75 percent of Huhtamäki Films' diverse product portfolio, which ranges from the outer layer of baby diapers to acoustic and thermal insulation to films for sealing sewage pipes, was developed to meet specific customer needs. The products are made with various degrees of siliconization, barrier properties to protect against light or fluid, and they can have tear-proof, biodegradable or antistatic qualities.
The films and liners are produced at four facilities that employ more than 600 people in Forchheim; Malvern, Pa.; Thailand and Brazil. The company has more than 1,000 staff in total.
Huhtamäki Films is the first company to be added to DBAG's portfolio for the 2014-15 financial year. The management buyout offers a chance to expand the product offering, according to Peter Wahsner, executive vice president of Huhtamäki Films.
“Our new shareholders are providing us with the opportunity to move our business forward on our own,” he said in a news release. “We see potential and want to invest — in capacity and products for new applications.”
“The company's innovative strength and broad customer base are a good platform on which to do exactly that,” added Rolf Scheffels, a member of DBAG's management board.
DBAG expects to complete two or three management buyouts and up to three expansion capital investments annually. Managed and advised assets currently add up to about 1.3 billion euros ($1.6 billion). The Huhtamäki transaction, which is subject to regulatory clearance, is scheduled to be completed by the end of the year.