Private equity awards 2012: DACH deal of the year shortlist

Shortlist for DACH deal of the year.

by . .

Quadriga Capital and Equistone Partners Europe for Jack Wolfskin
GMT Communications Partners for Bigpoint
3i for Norma
Advent International for Takko
Palamon Capital Partners for Dress-for-less
Silverfleet Capital Partners for European Dental Partners

Quadriga Capital, Equistone Partners Europe – Jack Wolfskin

One of Europe’s most hyped exits of 2011, Quadriga Capital and Equistone Partners Europe (ex-Barclays Private Equity) walked away from Jack Wolfskin with a hugely successful 13.7x cost. Recognising a top-class company in a country with slow consumer trade, the impressive multiple came from taking the German outdoor clothing retailer cross-border to become a true European leader with a burgeoning presence in Asia. The co-investors may have held the business for six years but still managed to achieve a 63 per cent IRR for LPs.

When Quadriga won the auction in May 2005, after which it let Barclays in on the deal, Jack Wolfskin had an enterprise value of less than €120m. In the next six years revenues grew from €67m to nearly €350m. By the time the two sold the business on to Blackstone in July last year it was valued at €700m. 

GMT Communications Partners – Bigpoint

GMT spotted a winner with Hamburg-based Bigpoint, a developer of games that can be played directly via a user’s web browser. At the time of exit in April 2011, chief executive Heiko Hubertz said that being European depressed its value and that it would have fetched more money in the US. Still, at $350m (€268.1m) it represented the second-largest deal for an online gaming company after Walt Disney’s acquisition of Playdom for $532.2m the previous year. 

Unlike social gaming companies such as Zynga and Playfish, Bigpoint has not aligned itself with Facebook, instead building its audience through media partnerships with the SyFy channel, which broadcasts Battlestar Galactica; gaming websites IGN and Gig; and news sites such as Bild.de. And even without a Facebook alliance the business manages to draw 250,000 gamers to its suite of titles every day. 

After selling the lion’s share of its stake to Summit Partners and TA Associates, GMT is thought to have made in excess of 4x its money. And the TMT specialist clearly sees big things for Bigpoint yet, since it retained a minority interest. 

3i – Norma

Norma is the archetypal Mittelstand success story. Originally taking a stake in Rasmussen in 2006, 3i then created the clamping and connecting components group by merging it with ABA, a Swedish peer that the firm had already owned for several years. Two further acquisitions – Breeze Industrial Products and RG Ray Corporation – only boosted Norma’s revenues even further. 

By doubling both sales and profit margins, 3i managed to quadruple Ebitda during its five years of ownership. Installing a new executive management team and moving former head of sales Bernd Kleinhens up the ranks to managing director ultimately paid dividends. 

In the end, 3i spotted an opening in the IPO window at the beginning of 2011 and sold off a chunk of its equity in April for €386m. At the offering value 3i took home a 5.5x return on its investment, but that’s not the end of the story. A strong believer in Norma’s future, the firm has kept a 36 per cent stake so that it can, hopefully, benefit further at a later date. 

Advent International – Takko

The first exit of the year, German fashion chain Takko was sold shortly before Christmas 2010, the deal closing in the first quarter. Takko’s sales increased by 30 per cent to ¤938m after Advent acquired the chain for €770m via a secondary buyout from Permira in 2007, and its store count was up to 1,500 from 1,050 in that time. But where Advent really excelled with Takko was in tapping new markets. In four years it expanded into 11 new countries, giving it a presence in 15 European markets.

Advent had provisionally pencilled in an IPO for Takko in 2011, but ditched this float in favour of an approach from Apax thought to be in the region of €1.2bn. 

Palamon Capital Partners – Dress-for-less

Realising that people love designer clothing – and especially at a bargain – paid off for
Palamon Capital Partners when it backed Dress-for-less. The web retailer, which sells
end-of-season designer clothing online through an efficient delivery and return system, went to the firm in 2007 and was sold last March for an undisclosed price. 

During Palamon’s ownership, the company achieved compound annual growth rates of 35 per cent in revenue and profitability through expansion across Europe, entering the full-price fashion segment via the acquisition of specialised online retailer Kolibri. The real winner was backing a niche that still had spades of growth ahead of it when held up against the UK and US. While the price tag is not known, Palamon made 3x its money and generated an IRR of 40 per cent. 

Silverfleet Capital Partners – European Dental Partners

European Dental Partners may have been held for a grand total of seven years, but in that time Silverfleet Capital Partners embarked on a steady buy-and-build play that included six acquisitions. 

The platform company M+W Dental, a German dental distributor, was acquired by Silverfleet in October 2004. The firm then pushed eastwards over the border, buying
both Czech Dentamed and Slovakian Stomatol in 2006. At the end of 2006 EDP bought InteraDent Zahntechnik in Germany. During 2007, Silverfleet supported the acquisitions of Prodent International in Slovenia and Dentatus in Croatia. Finally, by April 2011, EDP had gained such value and scale that Swedish trade buyer Lifco Dental International moved in and paid €170m for the built-out business.