EQUISTONE NEWS | September 2019

Although forecasts of a cooling private equity market in Germany have been mounting for months, we are happy to report that we haven’t been affected by this. In the past few months, Equistone has made several acquisitions. This is why, according to a recent analysis by GCA Altium, we continue to rank among the most active private equity firms in Germany.

In March we acquired RENA, a manufacturer of wet-chemical surface treatment equipment. In July, we signed an agreement to buy Heras, a Dutch supplier of property protection products as well as fencing and security systems. Additionally, in August we acquired a majority stake in Omnicare, a pharmaceutical wholesaler operating throughout Germany, which primarily distributes finished medicinal products to compounding pharmacies for the patient-specific production of cancer drugs. The Heras and Omnicare transactions are still subject to the approval of the relevant competition and antitrust authorities. We also supported our portfolio companies in implementing their buy-and-build strategies, which have enabled many of them to significantly improve their market position over the course of the year. For example, United Initiators has made a sizable bolt-on acquisition in Turkey, providing it with access to new markets and adjacent oxygen-based products. The Dutch Unlimited Footwear Group continues to grow and has expanded its product portfolio with the complementary Nubikk brand. BOAL Group, a supplier of glass and side wall systems for greenhouses has successfully expanded in the Benelux region, enlarging its offering. Finally, Group of Butchers, an artisanal Dutch producer of meat products, continued with its growth strategy through its acquisition of a specialist supplier of BBQ products in the Netherlands in July, having already completed several other add-ons over the past year.

We are very satisfied to see that there is a lot happening in the Netherlands, a region in which we have been doing business for a long time. The market is characterised by strong deal flow and we view the Netherlands as an extremely attractive region that is defined by the strength of its mid-market businesses. We work with management teams in the region who think entrepreneurially and are results-orientated. This year we took two significant steps to bolster the local support we provide to portfolio companies and transactions going forward in the region. In May, Hubert van Wolfswinkel joined the team as a Director. He knows the Dutch market particularly well and will look after the region from the Munich office as well as an additional location in Amsterdam, whereby he is fully integrated into the DACH/NL team in terms of operations and resources. We also have gained another new team member this year by appointing Julia Brunswicker as an Investment Manager in Munich.

United Initiators is on the move as it enters new markets and product areas

Toothpaste, disinfectant, plastics and soil treatment: United Initiators’ wide range of products is used in many everyday items, for both personal and industrial use. Headquartered in Pullach near Munich, Germany, the company has been producing organic peroxides, persulphates and other speciality chemicals for over a hundred years and supplies a diversified customer base in Europe, North America and the Asia-Pacific region. Equistone invested in the company in August 2016 to further accelerate its geographic expansion and the development of its product portfolio.

The latest add-on has this specific aim. In August, UI acquired Hidrojen Peroksit A.S. (“HPAS”) and its production site in Bandirma, Turkey. HPAS operates production lines for the manufacturing of hydrogen peroxide (H2O2), steam reformers for water hydrogen production (H2) and its own Cogen unit for steam and electricity generation. Its principal customers are in Turkey and its neighbouring countries. The plan is to invest specifically in increasing the production capacity of the HPAS plant, in order to access new markets in non-polymer product areas and applications such as textiles, water treatment, agriculture and mining.

Unlimited Footwear Group continues to expand and bolsters its product portfolio with the Nubikk brand

Unlimited Footwear Group (“UFG”) designs and sells shoes for men, women and children in the mid-price segment. In addition to selling private labels, UFG also markets its own brands, Bullboxer and Rehab as well as various licensed brands such as Gaastra, Björn Borg, Supertrash and New Zealand Auckland. With its comprehensive product portfolio, UFG supplies retailers across 52 countries with around 5 million pairs of shoes annually. Equistone acquired a majority shareholding in the Dutch company at the end of 2014. Since then, we have successfully continued UFG’s growth strategy together with the company’s management team.

In mid-July, UFG acquired Collective Footwear, along with its fast-growing and well-known Nubikk shoe brand, which is excellently positioned in the Benelux countries and has already successfully expanded into Germany, Scandinavia and the UK. Both companies are set to profit from the acquisition. Just like UFG, Nubikk reflects current trends in high fashion, on the catwalk and in streetwear and translates the designs into its own timeless and affordable collections. Thus, the product portfolios of the newly partnered companies complement each other perfectly, especially in sneakers and boots for men and women. Most importantly, this deal will enable synergies in leveraging UFG’s global customer and sales network. In addition, both companies use the same outsourced production facilities in Portugal, bringing with it further potential for synergies.

BOAL Group on the way to becoming an integrated supplier of greenhouses

Globally, the Netherlands is regarded as a stronghold of modern agriculture. The small country with a high population density is the second largest vegetable exporter in the world, after the USA. Cultivation mainly takes place in greenhouses and is highly specialised. With BOAL Group, the Netherlands has one of the leading manufacturers of aluminium roof and wall systems for glass and poly greenhouses. In April 2018, we acquired a stake in the BOAL Group. BOAL Group operates in a fast-growing market and has been able to expand its already leading position.

With the recent acquisition, the company’s growth has further accelerated: In June of this year, BOAL Group acquired West.Neder.Land („WNL“). Based in Hoek Van Holland in the Netherlands, WNL manufactures sandwich panels, roof and wall components which are installed in service areas or in office and storage spaces of greenhouses and large garden centres. Compared to classic composite systems, sandwich panels have numerous advantages, in particular when it comes to heat insulation. Through this acquisition, BOAL Group has broadened its portfolio and is developing into an integrated provider of solutions for the greenhouse industry.

Case Study | Group of Butchers continues strong growth

In 2017, Group of Butchers („GoB“) employed 350 staff across six locations and generated revenues of 128 million Euros. Since then, the number of sites has doubled, five companies have been acquired, and entry into the German market has been achieved. These are substantial milestones for the Dutch meat speciality manufacturer since Equistone acquired a majority share at the start of 2017. GoB is the market leader for high-quality, artisanal meat products in the Netherlands, with a focus on sausage and minced meat specialities. Strong organic growth and market expansion through strategic acquisitions have enabled the meat specialist to grow considerably faster than its competition – both local suppliers and global corporations.

Founded in Tilburg in 1997 and initially active predominantly in the Netherlands and Belgium, Group of Butchers offers a wide range of high-quality meat products. From the beginning, its strengths lay in an intelligent product marketing strategy, which led to a stable retail customer base, and consistently high-quality standards in purchasing and production: an ideal starting position for the dynamic growth of Group of Butchers.

“With its high-quality product range and its stable customer base, Group of Butchers provides a superb platform for further expansion – both organically and through strategic acquisitions,” states Marc Arens, a Partner at Equistone, who lead the transaction in 2017. This objective has been supported by Equistone through a focused buy-and-build strategy since then.

In the Netherlands, Koetsier Vleeswaren was incorporated into Group of Butchers in August 2018. The wide range of meat and sausage products produced by the renowned company includes not only classic smoked sausages, but also vegetarian sausages. A few months later, Keulen Vleeswaren joined the group and further expanded the product portfolio with cured sausages and traditional meat products. This acquisition also expanded GoB’s service portfolio into the area of slicing and packing of meat products.

Entry into German market

In Q4 2018, Group of Butchers entered the largest European consumer market with two add-on acquisitions in Germany. Hartmann GmbH, a leading manufacturer of minced meat products from Warendorf (North Rhine-Westphalia), was acquired by the group in October 2018 and soon after, in November, it bought the Gmyrek Group, a long-standing and well-established meat and sausage producer with a particularly strong retail market position, based in Gifhorn (Lower Saxony). Remko Rosman, CEO of the Group of Butchers, says: “With Hartmann and Gmyrek, we’ve acquired strong players in Germany.”

Most recently, in July 2019, Group of Butchers acquired the Dutch company Schouten Vleeswaren B.V. (Schouten). The family business specialises in the production and sale of grilled sausages and BBQ products for the Dutch retail and out-of-home sectors.

Strong management and product innovation boost growth

To support organic growth, Group of Butchers has built a strong management team to support the CEO and CFO. The product portfolio was not only expanded through national and international acquisitions, GoB also capitalises on continuous innovation and product launches along the entire value chain to fill white spots.

“Together with the Group of Butchers’ management team and their excellent employees, we want to continue along the path that we have embarked on. There are further synergies to be leveraged within the group, especially in cross-selling, marketing and procurement, and as such there remains significant untapped potential for further growth,” summarises Marc Arens.

The Netherlands in focus

We have been operating regularly and successfully in the Netherlands for several years now. The Dutch companies in Equistone’s current portfolio include Unlimited Footwear Group, a manufacturer and supplier of footwear worldwide; BOAL, a high-tech greenhouse solutions specialist; and Group of Butchers, an association of artisanal butchers. In recent years, the region has increasingly moved into our investment focus. We see an attractive deal pipeline with a large number of mid-market players in strong market positions as well as management teams that think and act entrepreneurially. Up to now, we have looked after our portfolio companies and clients in the Netherlands from our Munich and Zurich offices. Now we can do so locally, with a dedicated office in Amsterdam. Our new colleague Hubert van Wolfswinkel, who joined us in May, operates from there, advising portfolio companies and overseeing transactions, which most recently included the acquisition of the Dutch-based property protection specialist Heras.

New appointments – Welcome to the Equistone team

Julia Brunswicker joined us as an investment manager in March 2019. She came to us from Deutsche Beteiligungs AG (DBAG) in Frankfurt. Prior to that, she was already active in the private equity sector, working for Bayern LB Capital Partners and Star Capital. She started her career with Deloitte in the M&A and Transaction Services department and will support transactions in the DACH/NL area from our Munich office.

Hubert van Wolfswinkel is a Director at Equistone. He has increased the strength of the DACH/NL team since he joined the Munich office in May, as well as establishing a dedicated workplace in Amsterdam. He will be responsible for investments in the region as well as the management of our portfolio companies. Before coming to Equistone, Hubert worked for Montagu Private Equity for seven years in their London and Amsterdam offices. He started his career at Bain Capital Private Equity and McKinsey & Company.

40 years of Equistone

40 years ago, in 1979, Equistone opened its first office in London. Founded as an investment arm of Barclays Bank under the name Barclays Development Capital Limited, the firm was spun out and rebranded as Equistone Partners Europe in 2011. In 2002, the first fund was launched; since then, Equistone has invested around 7.4 billion Euros across 156 transactions and completed numerous add-ons. Currently we are investing from our sixth fund. In addition to London, several other offices were opened across the UK, France, Germany, Switzerland and finally in the Netherlands.