Advent International Agrees Sale Of Axtone To IK Investment Partners

Advent International, the global private equity firm, today announced agreement to sell Axtone S.A., Europe’s largest rail freight buffer manufacturer, to the Pan-European private equity firm IK. Terms of the agreed sale, which is subject to regulatory approval, were not disclosed.

Advent acquired Kamax, which was then a mid-sized Polish business, in January 2006. At that time the company was a Polish-based market leader in rail wagon buffer, coupling and shock absorber manufacturing and maintenance, with an excellent engineering base and strong presence in Russia, but struggling to gain traction in Western Europe.

As per Kamax’ suggestion, Advent simultaneously purchased Keystone Bahntechnik, the German market leader in rail wagon buffers, crash systems and coupling devices, supplying OEMs across Europe and the Middle East. Both businesses were instantly integrated. The combined group, renamed Axtone, created Europe’s biggest company in the sector, headquartered in Kanczuga, Poland. As a result of the merger, Axtone got access to new markets such as Western Europe, India and Middle East, as well as to new technologies which further strengthened the company’s unique R&D capabilities.

Advent recruited Marcin Kowalczyk, a former senior executive at ABB, as CEO of Axtone. His role was to lead management and the 600-strong workforce in successfully consolidating both companies and further expanding the business across Europe and in Asia.

Axtone has achieved growth in both Western Europe and the world’s most rapidly growing rail markets, including Russia, Ukraine, China and India. Turnover for Kamax as a stand-alone entity upon acquisition was €24 million; in 2006 the group’s revenue was €49 million and in 2008, this is expected to reach more than €70 million.

Monika Morali-Efinowicz, the head of Advent International in Poland, commented:
“Together with the Axtone management team we have been able to implement a successful growth programme and transform what once was a mid-sized Polish company into a market leader in both Eastern and Western Europe, with fast growing presence in rapidly developing Asian markets. This is a prime example of how Advent as an investor can accelerate portfolio company growth, in particular through international expansion, access to new markets and technologies. We have been very pleased to see how Axtone used its potential and look forward to supporting other Polish and Central European businesses in their ambitious development plans.”

“Advent’s industrial sector expertise and support of Axtone’s international expansion helped us successfully enter new markets and led us to become a European leader in our industry. We have been fortunate to have a supportive, value-add investor with access to international markets and the financial muscle needed to drive growth. We now look forward to working with IK Investment Partners, another international investor who is committed to supporting us in the next stage of our development,” added Axtone CEO Marcin Kowalczyk.

Detlef Dinsel, Managing Partner responsible for Germany and the CEE region at IK, said: “We are delighted to acquire Axtone, a leading European supplier to the rail industry in Poland and Germany. We are looking forward to working jointly with Axtone management in further developing the company into a global leader for shock absorption technology for railways. Our intention is to apply IK’s successful buy-and-build strategy and to capitalise on growth opportunities as rail networks are expanded and modernised in many countries. This transaction represents IK’s first direct investment in the growing CEE region and we are very excited about the prospects of being an active investor in such a dynamic region.”

On the Advent side, the transaction was led by Monika Morali-Efinowicz, supported by Jakub Chelmicki. Advisers for Advent: Close Brothers (M&A), Clifford Chance (legal), Ernst & Young (financial and tax), Environ (environmental) and LEK (commercial). Advisors for IK: Freshfields (legal); Clifford Chance (legal financing), BCG (commercial), E&Y (financial), Unicredit (Austria Creditanstalt) (financing), Golder (environmental), Marsh (insurance).

About Advent International

Founded in 1984, Advent International is one of the world’s leading global buyout firms, with offices in 15 countries on four continents. A driving force in international private equity for more than two decades, Advent has built an unparalleled global platform of over 115 investment professionals across Western and Central Europe, North America, Latin America and Asia. The firm focuses on international buyouts, strategic restructuring opportunities and growth buyouts in five core sectors, working actively with management teams to drive revenue and profit growth in portfolio companies. Since inception, Advent has raised $24 billion in private equity capital and completed more than 200 buyout and private equity transactions valued at over $36 billion in 35 countries. Advent has been investing dedicated funds in Central & Eastern Europe since 1994 and closed its fourth fund for the region, at €1 billion, in April 2008. For more information, visit www.adventinternational.com

About IK

IK Investment Partners (“IK”) is a European private equity firm, having raised a total of €5.7 billion, including €1.7 billion in the latest fund IK2007. Since 1989, IK has acquired 67 European companies. The current portfolio encompasses 20 companies with a total turnover close to €7 billion. IK invests mainly in mid-sized companies with strong cash flow and profit improvement potential, operating in mature industries with fundamental underlying growth. For more information visit our new website: www.ikinvest.com.