CASE STUDIES

Starting point

Blue Cap AG acquired a stake in em-tec GmbH in 2014 as part of a succession solution. Even then, the company based near Munich was the market leader in the development and production of medical devices and blood-flow sensors. Today, one of the company’s core competencies is still non-invasive flow measurement using the ultrasonic transit-time method. At the time of the acquisition, this technology was mainly used for medical applications, particularly in the field of cardiac surgery and cardiac support systems.

The established positioning of the then family-run company in an attractive niche market was one of the main criteria for us for the full takeover. We recognised further growth potential for the technology used by the company, also for branches outside of medical technology. This niche market’s low susceptibility to cyclical fluctuations was another factor that made the acquisition attractive for us.

Support following acquisition

Our goal was to strengthen the company’s market position further and bring high-tech ultrasonic measurement to industries outside of medical technology. The first task, however, was to find a successor for the founder who was stepping down, and ensure a seamless change of management. It was particularly important to us in this process to preserve em-tec’s identity and corporate culture over the long term.

In the years following the acquisition, em-tec continually built up its product portfolio through innovative developments in the area of non-invasive flow measurement. Under Blue Cap AG’s watchful eye, the company grew into the world market leader for flow measurement in extracorporeal systems. The strategy of serving new sales markets was met by increased investments in sales activities. This enabled the company to significantly expand its market position in the growing bioprocess technology market.

The accelerated growth and strong starting position allowed for the expansion of the company’s organisation and also an increase in production capacities. Therefore, in 2018 – financed and supported by Blue Cap AG – the foundations were laid for the new company headquarters with space for 150 employees. Of particular importance was the new development centre, a 600-square-metre space where specialists today devote their time to creating product innovations.

Exit

While it was part of Blue Cap’s portfolio, em-tec was able to greatly improve its market position in the field of medical technology and successfully establish itself in the growing bioprocess technology market. This was clearly visible in the increase in revenue and earnings. Over the course of the investment, EBITDA more than tripled.

In 2020, Blue Cap sold its shares to the listed US company Dover Corporation. Dover Corporation is a diversified global producer of innovative devices, components, specialised systems, consumables, software and digital solutions and support services for a range of end markets, including medical and biopharmaceutical flow control applications. The sale offered em-tec great strategic potential. In the biopharmaceutical market above all, synergies were identified that can be leveraged under the new ownership.

In line with the best-owner approach, the sale to a strategic investor that can help em-tec to grow further was a resolute and lucrative step for Blue Cap that is in the best interests of em-tec. em-tec’s culture and identity will endure under the new owner due to the unique position of the technology in the market and the benefits of the new premises in Finning.

Starting point

The story of con-pearl GmbH, Geismar, started in 1990 with the invention of con-pearl® technology. The company’s lightweight boards offer a wide range of uses, e.g. in packaging for the logistics industry and van flooring and interior trims for the automotive industry.

The company had been through numerous changes to its shareholder structure and strategy in the past, and was broadly positioned in different areas of the market with products that had few synergies between them. As a result, the company, at the time called friedola Tech, was experiencing a financial crisis. Incoming orders had fallen significantly, and as a result revenue and earnings had also declined. The Bremen site, which produced car boot carpets, had been making a loss for years. The company sought a new investor that could get it back on track to success.

An important investment criterion for Blue Cap AG is clear potential for transformation and value growth. When we took over friedola Tech in August 2019, we could see significant potential for improvement despite the difficult situation the company was in. This related to the technology and innovation leadership expertise that the company had in the area of lightweight boards, which was supported by the company’s own recycling plant. A market analysis pointed to fundamental positive trends in various different end markets. This included a worldwide increase in trade volume (especially e-commerce), the trend towards lightweight solutions, e.g. in the automotive industry, and reusable transport packaging in the logistics sector.

Support following acquisition

Shortly after the acquisition, we worked with the management to develop a plan for growth that involved focusing on the core business and reducing complexity. Strategically, our goal was to use the lightweight board, with its attractive product properties such as flexibility, resistance, low weight and a high proportion of recycled raw materials, in other applications and to not only act as a supplier ourselves, but also to introduce complete systems to the market. First of all, loss-making areas such as the manufacture of car boot carpets and the production of injection moulded parts for the automotive industry were closed down. The processes at the main plant in Geismar were restructured and, at the same time, efforts were focused on expanding the lightweight board business. We boosted sales activities in order to tap into new customer groups, and modernised the IT landscape thanks to additional investments. Alongside this, with Blue Cap’s support con-pearl acquired Recyplast GmbH in 2021, and established a seconds recycling site for plastics. The two recycling plants are now an essential part of the company's value chain and enable the extraction of a sustainable raw material from industrial waste.

Current situation and outlook

The strategic and operational measures led con-pearl back to a profitable growth path. Business in the logistics sector picked up sharply, not least because of the corona pandemic and the increasing shift in retail to e-commerce. In 2022, which was characterized by supply chain problems and difficult raw material availability, con-pearl benefited from its own recycling plants and the associated independence from raw materials.

In 2023, due to the economic situation, the logistics business will probably not continue at the same level as the last two years. It is all the more important to take the next steps together with the company. And these are multilayered: on the one hand, new market segments are to be developed. Currently, con-pearl is already working on the first projects in the construction industry, which offers great potential for the use of lightweight boards. On the other hand, we are working on further internationalization, in particular on strengthening sales in the USA.

Last but not least: con-pearl plays a leading role within the Blue Cap Group in terms of sustainable value creation. Thanks to the company's own recycling plants, it is not only possible to achieve an industry-leading proportion of recycled raw materials in production, averaging 80%. As one of the few providers in the logistics sector, con-pearl is able to offer a "closed-loop" recycling system for reusable packaging from a single source, in which the packaging is collected again at the end of its service life and recycled in its own plant in order to use the extracted material to produce regranulate afterwards.