Co-investment with GCI Management and German Expansion
16 April 2008
ACP Capital Limited ("ACP Capital" or the "Company": APL.LN), the specialist
integrated finance and asset management company focused on European small and
medium sized enterprises ("SME"s), today announces its first equity co-investment with
GCI Management AG ("GCI"), ACP Capital’s key strategic partner for its equity strategy
in Germany. ACP Capital is acquiring 40% of the share capital of the newly established
GCI Automotive Holding GmbH (“AutoHoldCo”), which will become part of ACP
Capital Strategic Equity’s (“ACP Capital SE”) portfolio, while GCI will hold the
remaining 60% of the shares.
ACP Capital Strategic Equity
The shareholding in AutoHoldCo and subsequent deal flow will be transferred to ACP
Capital SE following its launch next year. ACP Capital SE is intended to be a strategic
equity vehicle that will hold strategic equity investments in European SMEs. These
positions are intended to be originated through equity–focused localised origination
platforms (such as GCI), through ACP Capital’s network of contacts and co-investments,
and as a result of ACP Capital’s integrated finance strategy. ACP Capital SE intends to
target a portfolio of European equity assets diversified by geography, industry sector and
company size. The investments of ACP Strategic Equity will be either 1) direct
investments, 2) co-investments (like MSG), or 3) fund investments.
This transaction, in which ACP Capital is investing circa €3 million from its cash
resources, also represents the first co-investment between ACP Capital and GCI. The
partnership fulfils a key strategic objective, set out at the time of ACP Capital's
investment in GCI, of building a pan-European merchant banking and asset management
platform for SMEs in its core markets of Germany, Italy, France, and the UK.
The transaction will see AutoHoldCo will acquire 94% of the share capital of
Maschinenfabrik Spaichingen GmbH (“MSG”), which will become the cornerstone
investment for AutoHoldCo. AutoHoldCo intends to consolidate the fragmented
automotive parts supply industry by selectively acquiring mainly smaller German based
companies in this sector, where the businesses are characterised by highly skilled
engineering expertise, specialist knowledge and quality products in the niche markets of
plastic, metal parts and special machinery. Several targets have already been identified.
Maschinenfabrik Spaichingen GmbH
MSG is a medium-sized, formerly family-owned, German business and is active in three
main areas: automotive parts manufacturing for commercial diesel engines, control
engineering (mainly circular knitting machines) and the manufacturing of ultrasonic, hot
air and laser welding machines for the automotive industry. All products are
characterised by highly skilled engineering work.
MSG is engaging in substantial growth capital expenditure over the next 5 years,
primarily to deliver new contracts recently secured. The capital expenditure is expected
to be partially funded by debt and equity. Total revenues of the MSG group in 2007 were
approximately €67.5m and total assets are around €65m.
GCI Management AG
GCI is a Deutsche Börse-listed private equity company focused on the SME sector in the
German-speaking part of Europe. Alongside its investment activities, GCI also operates a
consultancy business in the areas of strategy, management and financing. GCI intends to
continue to manage its existing assets and funds under management with future growth
focused on later-stage private equity and turnaround investment opportunities, primarily
in Germany. ACP Capital aims to provide a series of financing products to GCI's existing
and future investment portfolio which would enable GCI to expand its financial product
ranges in areas such as senior debt, and senior and junior mezzanine. This partnership is
also expected to enable GCI to increase overall transaction sizes, leading to possibilities
of investing in majority stakes and buyouts with longer time horizons.
ACP Capital anticipates that the strategic relationship with GCI will generate a range of
new investment opportunities. As a result of a co-investment agreement, ACP Capital is
granted rights to co-invest in the equity of GCI transactions on the same terms as GCI,
generating potential deal flow for ACP Capital SE. Additionally, ACP Capital will be the
preferred debt funding partner for GCI transactions, resulting in potential opportunities
for senior debt underwriting and mezzanine lending opportunities for ACP Mezzanine
Limited, the AIM-listed sub-investment grade lender managed by ACP Capital.
Other benefits for ACP Capital arising from the acquisition of the strategic shareholding
include leasing business opportunities throughout Europe and further market presence in
Germany, following the establishment of an associated office in Munich.
Derek Vago, Chief Executive Office of ACP Capital, commented:
“This first equity co-investment with GCI underlines the possibilities of ACP Capital’s
business model. We are looking forward to continuing the expansion of our product range
of new investment opportunities and improving our market presence.”
Enquiries to:
Rob Bailhache & Nick Henderson,
Financial Dynamics
(Media Relations)
+44 (0) 207 269 7200
Sacha Macintosh, ACP Capital UK LLP +44 (0) 844 800 4530
Chris Wells, Stewart Wallace, Collins
Stewart +44 (0) 207 523 8350
For further information on ACP Capital, please visit www.acpcapital.com.
About ACP Capital
ACP Capital (LSE AIM: APL) is a Jersey-incorporated specialist integrated finance and
asset management company focused on providing equity and debt products to European
small and medium sized enterprises (the “SMEs”).
ACP Capital aims to benefit from opportunities generated from the strong growth in SME
demand for integrated finance, combined with the reduced appetite for SME lending
among traditional banks owing to higher regulatory capital requirements.
In order to better serve the SME markets directly, ACP Capital is establishing localised
operating platforms (the "Platforms") in its key markets of Germany, France and the
United Kingdom. These include to-date Leasecom, a leading SME finance provider in
France, and GCI, a specialist private equity firm for the German SME market. Further
Platforms are being evaluated currently to serve the remaining key markets. |
