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Equistone Partners Europe acquires a majority stake in Karl Eugen Fischer from EQUITA

05 Aug 2013

Funds managed by Equistone Partners Europe Limited ("œEquistone") have acquired a majority stake in Karl Eugen Fischer GmbH ("œKEF", "œthe Company"), a leading manufacturer of cutting systems for the tyre industry. The shares in the Company were purchased from Equita GmbH & Co. Holding KGaA ("œEQUITA"). Following the transaction, Equistone and the KEF management team will hold all of the Company's shares. This investment is predominantly aimed at stabilising the Company"™s existing customer base as well as gaining new customers in the tyre industry. In addition, KEF will focus on further improving and broadening machine functionality and the automated production of its cutting systems. The transaction remains subject to approval by the relevant competition authorities and the deal value is undisclosed.

The Karl Eugen Fischer Company was founded in 1940 in Burgkunstadt, in Upper Franconia. The Company's headquarters and sole manufacturing site have been located there ever since. In the mid-1970s, KEF developed the first cord cutting system for the tyre industry, and in doing so laid the foundation for further international expansion. KEF produces cutting machines which assemble plies and breakers giving the tyre shape and providing stability when driving. Today, the Company has more than 450 employees and annual sales of around €76m (2012). The Company supplies almost all well-known tyre manufacturers worldwide, especially in emerging countries such as China. As well as its operations in the tyre industry, KEF also provides the metalworking industry with sheet metal processing machines.

Peter Hammermann, Senior Partner at Equistone Partners Europe, commented: “With this investment in KEF we have succeeded in acquiring a medium-sized German company which we view as a “Hidden Champion”. With a market share of almost 70 percent, Karl Eugen Fischer is the world’s leading supplier of high-quality and market-specific cutting systems, and is already active in its relevant growth markets. Working with the existing management team, we will capitalise on the Company’s existing potential and help the business to continue to pursue its current expansion strategy.”

Simone Thies, Commercial Manager at Karl Eugen Fischer, explains: “In the past, our primary focus has been the sale of new machines; however, the maintenance and repair side of the business is becoming increasingly important to our customers. As a result we will work with Equistone to promote our servicing business, as well as stabilising and expanding our current market position, with the aim of strengthening customer loyalty. We are looking forward to working with Equistone going forwards.”

EQUITA purchased KEF in 2008. Since EQUITA’s investment in the Company, KEF has increased its international footprint, notably with the creation of a new production site in China. EQUITA also provided support during a change in the Company's management team. With this transaction, EQUITA has been able to double the amount of capital invested in KEF over the five-year investment period.

Dr. Peter Hammermann, Dr. Marc Arens, and Leander Heyken led the transaction for Equistone.

Equistone was advised on the deal by Ashurst (Legal and LDD), Ernst & Young (FDD, TDD, and structure), N+1 (Debt Advisor), and AMR International (CDD).

Dr. Michael Hönig, Dr. Hansjörg Schnabel, and Christine Weiss led the transaction for EQUITA.

EQUITA was advised by Robert W. Baird (M&A) and Watson, Farley & Williams (Legal) on the deal.

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