22.03.2013

Deutsche Beteiligungs AG acquires Stephan Machinery GmbH

Machine and plant construction for food industry / MBO alongside DBAG Fund V

Frankfurt am Main, 22 March 2013. Deutsche Beteiligungs AG (DBAG) and its managed private equity fund DBAG Fund V have announced that they will acquire Stephan Machinery GmbH (“Stephan”) in a management buyout (MBO). DBAG and the vendor, Italy-based IMA Group (www.ima.it), signed a contract to that effect today. The completion of the contract is still subject to clearance by the cartel authorities. The purchase price for the debt-free company amounts to approximately 40 million euros. DBAG will invest up to 3.7 million euros from its balance sheet for the acquisition and hold an interest of about 19 percent in Stephan. Co-investing DBAG Fund V and members of Stephan’s management will acquire the remaining interests. The transaction is expected to be completed within the next three months.

Stephan (www.stephan-machinery.com) designs and builds machines for food production processes. In 2012, the company generated revenues of about 42 million euros. Its machines provide cutting-edge technology and are used for thermal processing of liquid or semi-liquid food products such as sauces, soups or baby food. Contrary to most other competitors, Stephan has its own engineering centre whose competency extends to designing complete plants. Stephan is therefore able to offer customers integrated production line solutions. The company’s proprietary process machines form the core technology, whereas procurement components are employed for upstream and downstream process steps, such as discharging basic ingredients and the final packaging. DBAG is very familiar with business models such as this from its portfolio company Romaco. Romaco’s subsidiary Fryma-Koruma partially serves the same groups of customers, but provides machinery for cold processing of food products. Both processes are complementary in food production.

Stephan’s customer base encompasses all major international food producers in the product segments it serves, as well as key clients in growth markets. This documents Stephan’s leading position in its – partly small – niche markets. Stephan is, for instance, the strongest global competitor among internationally operating machinery providers in the segment of processed cheese technology, boasting a market share of 30 percent. 

Stephan was founded in 1953 as a family-run business in Hameln, near Hanover, Germany. In 1999, the company was taken over by the Italy-based Sympak Group, which, in turn, was acquired by the IMA Group in 2011. IMA focuses on packaging machinery and is now divesting Stephan, because it is not part of the core business. Stephan employs a staff of 180, of whom 120 work in production, assembly and engineering at its headquarters in Hameln. The company operates a development centre in the vicinity of Hamburg; almost 50 employees are located at sales offices in France, Great Britain, Belgium, Poland, Russia, Singapore and the US.

“Stephan possesses systems competence for complete processing lines and is the leading provider in a highly attractive segment of the food industry,” said Dr Rolf Scheffels, a member of the Board of Management of DBAG, on signing the agreement today. “The food market is stable; segments that are relevant for Stephan Machinery such as convenience food and baby food are growing and create good potential; added to that is the growth in emerging countries – which all sums up to very real opportunities for companies with leading-edge technology, such as Stephan,” Dr Scheffels commented.

“In DBAG, we found a financially strong and skilled partner with considerable sector experience. The partnership will enable us to continue developing our group of companies, tap new markets and build on our technological leadership. We are delighted about that partnership,” said Olaf Pehmöller, Stephan Group CEO.