Cognetas LLP, an independent mid-market European private equity firm, has agreed to sell KSM Castings Group (KSM) to China's CITIC Dicastal Wheel Manufacturing Co, Ltd (CITIC Dicastal), one of the world's largest suppliers of cast aluminum wheels for the automotive industry.
In 2005, Cognetas led the management buy-out of KSM Castings, formerly ThyssenKrupp Fahrzeugguss, from ThyssenKrupp AG. KSM is recognised as a technology leader in the global light metal castings industry and has an excellent customer base consisting of blue-chip automotive OEMs and Tier 1 suppliers such as Volkswagen Group, Daimler, Benteler, Bosch, ZF and TRW. Under Cognetas' ownership, revenue increased by 39% to EUR 401 million in fiscal year ending March 2011.
Cognetas supported the transition to the current management team who have successfully led the business through the automotive crisis. Cognetas also appointed Klaus Hrubesch, former CEO of Neumayer, Gerhard Höfig, former head of purchasing at Porsche, and Klaus Schneider, formerly CEO of KSM Castings until 2007, as Operating Partners to support KSM with their extensive industry experience and drive the development of the company.
Frank Boshoff, CEO of KSM, says: "Cognetas has been a very supportive shareholder and together with its industrial advisors provided valuable expertise for KSM. Under Cognetas' ownership we have redefined KSM's business strategy, invested over EUR 135 million to support growth in our German and Czech plants and internationalised KSM's footprint by establishing a presence in China. We welcome CITIC Dicastal as our new owner as this combination offers a host of opportunities, in particular in the strongly growing Asian automotive market."
Zuo Xu, President of CITIC Dicastal, says: "This investment is an important step for CITIC Dicastal towards expanding into the businesses of chassis, powertrain and auto body as well as broadening the technological capabilities in the Group. The transaction offers excellent cross selling potential of both KSM's and our product portfolio in respectively Asia and Europe and poses a perfect strategic match. We aim to establish KSM as a global player and are prepared to support KSM's strategy with additional investments. We see the current management and employees of KSM as crucial for the company's continued success."
Frank Hermann, Partner at Cognetas, says: "This transaction marks Cognetas' third successful exit this year. KSM has shown a fantastic development in recent years and is now well-positioned for future growth with a Chinese owner due to its unmatched development capabilities, strong product and process know-how as well as its international reach and financial stability."
The transaction is subject to approval by the Chinese government and the relevant regulators and is expected to close in the second half of 2011.
Cognetas is being advised by Jefferies and White & Case in connection with this transaction.