DEEN
Internationalisation and enlargement of product range
€59.2mn
equity investment
CHF256mn
revenues 2017
60
Employees 2017

KEY FACTS AT A GLANCE

  • Development to become the world’s leading independent specialist in data communications solutions for railway vehicles
  • Expansion of capacities in production, development and sales
  • Revenues and earnings expected to exceed the prior-year level

duagon Holding AG

Investment by
DBAG FUND VII

€60.7mn

DBAG'S INTEREST

€13.8mn

Management-Buy-Out
Shareholders:
DBAG FUND VII

97.2%

EQUITY SHARE BELONGING TO DBAG

22.0%

other shareholders

2.8%

First invested

JULY 2017

REVENUES in CHFmn

 

15

 

2015

 

17

 

2016

 

25

 

2017 (EXP.)

As of 31 December 2017

~70

PERCENT

of systems in railway vehicles will be connected to each other by 2025.

Rail transport is becoming increasingly attractive: megatrends such as population growth and increasing urbanisation worldwide are fuelling higher demand for trains. At the same time, railway vehicles are becoming increasingly sophisticated, with more and more systems now being controlled via a central network.

DEAL CAPTAIN'S OPINION

The global market for railway vehicles has been reporting constant growth rates of between two and three percent in recent years, driven by the expan sion of high­speed lines and inner­city underground railway systems. As the world’s population continues to grow – particularly in densely populated regions –  the demands in terms of mobility and sustainability are increasing as well. We expect this trend to continue. Railway vehicles are also becoming more technically complex as a result: the proportion of trains equipped with a TCN (“train communication network”) is increasing, as is the number of systems that have to be connected to the TCN and reconciled with each other in these trains. This development offers additional growth potential for duagon in its role as a “complexity manager”. Ultimately, communication between a rail vehicle’s numerous subsystems relies on duagon’s products.

PROFILE

duagon AG, which has its registered office in the Swiss city of Dietikon, was established in 1995 and has since become a leading inde-pendent provider of network components for data communication in railway vehicles. The company’s products allow individual railway vehicle systems, such as doors, brakes, air conditioning systems and the primary control computer, to communicate via what is known as the TCN (“train communication network”). This makes it easier to integrate these systems into the train manufacturers’ networks and limits sources of errors in the process. This allows suppliers to concentrate on their core competencies, namely the development of the individual railway vehicle components. duagon products are used by virtually all train manufacturers and system suppliers.

POTENTIAL FOR DEVELOPMENT

duagon has established strong relationships with customers in China, the world’s largest market for railway vehicles, over the last ten years. In order to exploit the existing growth potential, the company intends to further expand its sales network, its development capacities and its supporting functions, particularly in China and in other foreign markets. duagon aims to establish itself as a specialist in providing solutions for data communication in railway vehicles by offering a broader product portfolio and via acquisitions in both the immediate and extended competitive environment.

FINANCIAL YEAR 2017

Given the positive development witnessed in the first half of the year and that incoming  orders remain strong, duagon expects its revenues for 2017 to be up in a year-on-year comparison. Despite the push for measures to expand capacities and the associated  expenses, earnings are also expected to be up on the previous year.

OUTLOOK AND OBJECTIVES

DBAG and DBAG Fund VII acquired a majority stake in duagon in July 2017. At the start of the investment, the focus of the management is on expanding the company’s sales and production capacities. This will allow duagon to respond to the sustained high demand, particularly among its Chinese customers. The company’s aim to expand its product range will require the reinforcement of personnel resources working in development. In the medium term, duagon’s management also aims to forge ahead with establishing the company as a one-stop shop and to identify potential targets for add-on acquisitions.

duagon has developed long-standing customer relationships and broad-based  technological expertise in its niche market. Its strong competitive position and the very positive market drivers provide an ideal environment for above-average growth.

Responsible team member

TOM ALZIN, MANAGING DIRECTOR

In over twelve years at DBAG, Tom Alzin has been involved in a large number of equity investments and divestments, as well as in the IPO of Homag Group AG. He brings his extensive experience in various sectors, such as mechanical and plant engineering and the service sector, to the table regarding the investment in duagon. The first DBAG management buyout in Switzerland is the sixth investment in total that Tom Alzin has been responsible for since he was appointed as a member of the Board of Management in 2011 (following on from FDG, Pfaudler, Schülerhilfe, Telio and Polytech).
Before joining DBAG, Tom Alzin studied business administration at HEC Lausanne and at the London School of Economics.

Tom Alzin
Tom Alzin

Managing Director

Tom Alzin
Name:
Tom Alzin
Investment focus:
Management buyouts
Telephone:
+49 69 95787-219
E-Mail:

Tom Alzin

Managing Director

Tom Alzin joined Deutsche Beteiligungs AG in 2004 and became a Managing Director in 2011.

He studied Business Administration at HEC Lausanne and at the London School of Economics.

Tom Alzin has more than twelve years of experience in private equity. During that time, he gained a wealth of knowledge, particularly in the mechanical and plant engineering and in the services sector. Tom Alzin was involved in numerous acquisitions and realisations and also in the IPO of Homag. The realisations of Homag and Spheros, subsequent to their very successful development, are two of his most successful transactions. Tom Alzin also led the investment process in FDG, Pfaudler, Schülerhilfe, Telio, Polytech and duagon and sits on the advisory councils of the companies, which are still part of the DBAG portfolio.

Current portfolio companies

Duagon Holding AG Telio Management GmbH Polytech Health & Aesthetics GmbH Pfaudler International S.à r.l.

Former portfolio companies

Tom Alzin

Managing Director

+49 69 95787-219
tom.alzin(at)dbag.de