Industri Kapital, a mid-market European private equity house, will sell Gardena, a European gardening tools manufacturer, to Husqvarna, a petrol-powered garden equipment producer, for €730 million ($963 million). The purchase price includes the transfer of debt, shareholder credits and pensions amounting to €416 million. Industri Kapital made 2.5 times its original investment in the business, including the recapitalisation, according to Detlef Dinsel, a senior partner at the firm.
JP Morgan and Citigroup gave financial advice to Industri Kapital while Ernst & Young and McKinsey & Mercer carried out vendor due diligence. Hengeler Müller, a German-based advisory firm, were Industri Kapital’s lawyers.
Industri Kapital’s other current German investments are Minimax, a European fire protection systems company; Sport Group, an outdoors sports equipment business, and DSI, a producer of post-tensioning and steel fastening parts.
Dinsel said: “In German-speaking countries, including Austria and Switzerland, the mid-cap market is very active. We will make a minimum of one investment next year and would possibly exit one portfolio company.”
Industri Kapital has completed seven exits over last 12 months, including VSM Group, a sewing machine manufacturer, which it sold to US private equity firm Kohlberg & Company, a US private equity firm, in December 2005, and Enermet Group, an energy metering equipment supplier, to Bayard Group for €90 million.
Last week Industri Kapital sold Consolis, a European concrete company, to private equity fund LBO France, making three times its money after a buy-and-build in 2005.
Industri Kapital manages almost €4 billion in fund commitments and is understood to be launching a fund early next year with a target of more than €1 billion.