ACP Mezzanine Provides €3 million Subordinated Debt to Support German Acquisition
16 April 2008
ACP Mezzanine Limited (“ACP Mezzanine” or the “Company”: ACPM.LN), the closedended investment company focused on sub-investment grade lending to European small and medium-sized enterprises (“SME”), today announces the provision of €3 million of subordinated debt to support the acquisition of Maschinenfabrik Spaichingen GmbH (“MSG”) by GCI Automotive Holding GmbH, a joint-venture between ACP Capital Limited (“ACP Capital”: APL.LN) and GCI Management AG (“GCI” : GCI.DE).
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 and the manufacture of ultrasonic, hot air and laser welding machines for the automotive industry. MSG is engaging in substantial expansionary capital expenditure over the next 5 years, primarily to deliver new contracts which have been recently secured. The capital expenditure is expected to be partially funded through debt and equity. Total revenues of the MSG Group in 2007 were approx. €67.5m and total assets are around €65m.
MSG represents the first of circa €500m of lending opportunities with attractive risk / return profiles that ACP Mezzanine is currently evaluating.
ACP Capital’s indirect acquisition of MSG is the first joint venture between ACP Capital and GCI, ACP Capital’s key strategic partner for its merchant banking strategy in Germany. This strategic relationship with GCI, a Deutsche Börse-listed private equity company focused on the SME sector in German-speaking parts of Europe, is anticipated to generate a range of new investment opportunities for ACP Capital. ACP Mezzanine will benefit as the preferred debt funding partner for GCI transactions, leading to potential opportunities for debt underwriting and lending.
Derek Vago, Chief Executive Office of ACP Capital Limited, the parent of ACP Mezzanine’s investment manager, commented:
“This transaction demonstrates the benefits for ACP Mezzanine arising from ACP Capital’s strategic platforms and integrated finance approach. Representing a diversification of the origination network for ACP Mezzanine, we view this transaction as an important step towards the next phase of ACP Mezzanine’s growth.”
Enquiries:
Rob Bailhache & Nick Henderson, Financial Dynamics +44 (0) 207 269 7200
(Media Relations)
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 Mezzanine and ACP Capital, please visit www.acpcapital.com.
About ACP Mezzanine
ACP Mezzanine Limited (LSE AIM: ACPM) is a Jersey-incorporated, closed ended investment company listed on AIM. It is a provider of sub-investment grade finance to European small and mid-sized enterprises – with a primary focus on the UK, France, Germany and Italy – originating, structuring and underwriting the majority of its investments through ACP Capital Limited (“ACP Capital”: APL.LN) and ACP Capital’s European network. ACP Mezzanine aims to optimise risk-adjusted returns by actively managing its portfolio and to distribute at least 85% of profits as dividends. ACP Capital Limited owns 47% of ACP Mezzanine and, through a subsidiary, acts as its investment manager.
Fundamental changes in the market, such as Basel II, are expected to accelerate demand for alternatives to traditional bank financing in these segments. As a non-regulated lender, ACP Mezzanine is not affected by Basel II. In line with its strategy, ACP Mezzanine has a small exposure to the retail mortgage backed securities sector as well as an anticipated negligible exposure to the US (expected to be limited to certain US infrastructure assets).
By taking control of a majority of the underwriting process through ACP Capital’s investment manager, ACP Mezzanine benefits from a diversified flow of assets whilst ensuring a risk-balanced growth.
By the end of 2009, the Company intends to have €550 million of assets under management and looks set to achieve its target balance sheet mix as stated in its admission document.
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.