(Bloomberg) -- Canada Pension Plan Investment Board agreed to acquire a stake in CeramTec GmbH, the German technical ceramics maker owned by buyout firm BC Partners.
BC Partners and Canada Pension Plan will each own about half of CeramTec along with their co-investors, they said in a statement Tuesday, confirming an earlier Bloomberg News report. The transaction values CeramTec at about 3.8 billion euros ($4.5 billion) including debt, people with knowledge of the matter said.
As part of the transaction, BC Partners will sell its CeramTec holding to its 11th fund, according to the statement. The move allows it to own the company for longer while returning money to backers of its 10th fund.
The deal adds to the $18.4 billion of private equity purchases announced in Germany this year, data compiled by Bloomberg show. CeramTec, based outside the southern German city of Stuttgart, produces industrial and technical ceramics for the medical, automotive, electronics and chemicals industries. Its products include everything from hip joints to car parts.
“CeramTec was not an opportunistic acquisition for us but rather a deliberate, targeted investment which met our criteria of scale and profitability,” Hafiz Lalani, Canada Pension Plan's head of direct private equity for Europe, said in an interview. “We see the opportunity to build a fantastic company in CeramTec and will leverage our experience, network and global reach to help achieve that goal.”
Rival Suitors
Canada Pension Plan will contribute about 800 million euros of equity for the deal, it said in the statement.
A consortium of Partners Group Holding AG and CVC Capital Partners was competing with suitors including chemical producer Celanese Corp. to acquire the business, Bloomberg News reported last month. The parties were discussing a valuation of around 3.5 billion euros to 4 billion euros from the potential sale, people with knowledge of the matter have said.
Canada's PSP Investments and Ontario Teachers' Pension Plan are selling their stakes in CeramTec, Tuesday's statement shows. They teamed up with BC Partners on its original purchase of CeramTec, which valued the company at about 2.6 billion euros including debt, Bloomberg News reported at the time.
Future Acquisitions
BC Partners Chairman Raymond Svider said the private equity firm will look for further opportunities to grow CeramTec, including through acquisitions. It aims to expand the company's medical business and move into new segments within that space, Svider said in an interview.
“Even in public markets today, it's hard to find a comparable business of scale like CeramTec, and we see huge opportunities for future growth,” he said. “It made perfect sense for us to be part of the next phase of the company's development.”
CeramTec, which has about 3,500 employees, traces its roots back to a porcelain factory from 1903. The company generated close to 553 million euros of sales last year, according to the statement.
The deal marks at least the second time this year that BC Partners has brought in new investors to one of its portfolio companies. In June, it moved academic publisher Springer Nature into a new special-purpose fund backed by Neuberger Berman Group LLC after scrapping plans for an initial public offering of the business.
Bank of America Corp. and Morgan Stanley advised CeramTec's owners on the sale, while Canada Pension Plan worked with Nomura Holdings Inc.
©2021 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
