BY Richard Summerfield
Thyssenkrupp AG has agreed to sell its elevator business to a consortium of Advent, Cinven and Germany’s RAG foundation for $18.7bn.
Once completed, the deal will be the biggest private equity acquisition in Europe since 2007, when KKR took Alliance Boots Plc private in a deal valued at more than $23bn including debt.
Thyssenkrupp will use cash from the elevator unit sale to pay down borrowings and fund some of its pension obligations. The company is heavily indebted and in its most recent earnings statement, net debt jumped to €7.1bn.
“With the sale, we are paving the way for Thyssenkrupp to become successful,” said Martina Merz, chief executive of Thyssenkrupp. “Not only have we obtained a very good selling price, we will also be able to complete the transaction quickly. It is now crucial for us to find the best possible balance for the use of the funds. We will reduce Thyssenkrupp’s debt as far as is necessary and at the same time invest as much as is reasonable in developing the company. With this, Thyssenkrupp can pick up speed again.”
“Cinven is delighted to invest in and accelerate the growth of Thyssenkrupp Elevator both organically and through further acquisitions,” said Bruno Schick, partner and head of DACH and Emerging Europe at Cinven. “Further investment in product development, R&D and international expansion will enable us to grow the business sustainably over the long-term. Alongside Advent and RAG-Stiftung, we look forward to partnering with management to shape the next phase of this outstanding business.”
“Thyssenkrupp Elevator has established itself as an international market leader, with a strong and innovative product portfolio,” said Ranjan Sen, managing partner and head of Germany at Advent. “We look forward to working alongside Cinven and RAG-Stiftung to leverage our collective expertise and capital resources and to build on this excellent platform for further growth, thereby creating a strong, independent industrial company.”
The deal is expected to close by the end of the third quarter of 2020, subject to customary closing conditions and regulatory approvals.
News: Thyssenkrupp sells elevator unit for $18.7 billion to Advent, Cinven consortium