CASE STUDIES
Our success stories speak for themselves: Together with the portfolio companies, we are taking the next growth steps. We actively support them in their transformation. Our cases give you deeper insights – enjoy reading!
em-tec GmbH
Succession solution paves the way for strong growth
em-tec GmbH_
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.
Biolink GmbH
Numerous measures to support the growth course have led to impressive results
Biolink GmbH_
Starting point
The origins of Biolink and Blue Cap’s story date back to 2009 with the investment in Planatol GmbH, an industrial adhesives manufacturer based in Rohrdorf. Planatol brought Biolink Gesellschaft für Verbindungstechnologien with it into the Blue Cap Group. At its subsidiary Biolink, Planatol developed and produced solvent-free adhesive tapes for industrial applications in the aviation, automotive, Viscom, electronics and construction sectors based on innovative technology. The company still specialises in high-quality customised and project-specific tape systems today. Biolink can boast strong technical development expertise and a high level of product variability.
Support following acquisition
One of the first actions we took was moving the company to a new location in Waakirchen in 2010. With this move, we significantly increased production capacity and created the framework for further growth.
Over the course of the following years, with Blue Cap’s support the company invested in the continued development of innovative coating technology and the expansion of production capacities in particular. The development and introduction of new coating systems enabled the company to improve quality and gain access to additional customer groups.
We also focused on expanding our business with customised coating products. By developing highly specialised applications, Biolink has been able to set itself apart from mass suppliers. This is reflected in above-average growth rates in the key sales markets of the automotive and aviation industries. Biolink gained well-known customers, developed long-term customer relationships and established itself as a strong development partner.
To support its course of growth, we focused on optimising the company’s structures and processes at all times. Blue Cap provided support in the expansion of the commercial company’s organisation and with the ERP system in particular.
Exit
Although the years before 2009 were marred by stagnation and low profitability, the company managed to get back onto a sustainably profitable growth course during its time with Blue Cap. Revenue and earnings increased significantly. Over the course of the investment, EBITDA rose almost tenfold.
In 2017, Blue Cap sold its Biolink shares to Saint-Gobain Performance Plastics Isofluor GmbH, a member of the Saint-Gobain Group, via its subsidiary Planatol. The Saint-Gobain Group is a listed French industrial group that produces and distributes materials and solutions for the construction, mobility, health and other industrial applications markets. The sale resulted in a very attractive money multiple of around 45x.
con-pearl GmbH
Successful transformation through reorganisation and focus on core business
con-pearl GmbH_
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.
Neschen Coating GmbH
Turnaround and successful exit in a challenging market environment
Neschen Coating GmbH_
Starting point and support measures after the takeover
Blue Cap acquired Neschen, based in Lower Saxony, out of insolvency in 2016. The recently announced exit marks the end of a journey that was characterized by various stages and is also a good example of the implementation of our strategy. In this article, we would like to look back on the past few years and show you how we have developed the company since then with targeted transformation measures.
An important investment criterion for Blue Cap is recognizable potential for transformation and value enhancement. When we took over Neschen and its trading subsidiaries as part of an asset deal in 2016, there were clear starting points for bringing our experience and expertise to.
At the beginning of our entry, we carried out rationalization measures such as merging two locations. We also focused on the further development of the Industrial Applications segment. This was later followed by the expansion of European sales, including a new location in Switzerland, and expansion into the US market. In 2022, there were changes in management: Nils A. Honscha became Managing Director.
Extensive turnaround program in 2023
At the beginning of last year, we responded to customers' de-stocking measures, the incipient economic slowdown and an emerging sales gap with a fitness program. The measures mainly included cost-saving measures in the areas of personnel and material costs, strengthening sales and intensifying working capital management. Thanks to consistent implementation, the results were already clearly visible in earnings in the second half of 2023. At the same time, the order volume in the Industrial Applications and Documents divisions increased significantly again. By means of the previously implemented efficiency enhancement measures, Neschen was able to cope with the rising volume without any problems and the favorable cost structures benefited disproportionately from the increase in sales. For more detailed information on the fitness program at Neschen, please also read the related story in our Annual Report 2023, page 14 f).
Developments in 2024 and exit
The success of the fitness program and the positive development of Neschen are clearly reflected in the key financial indicators. As part of the regular review of the portfolio companies under our best-owner approach, the decision was made that a sensible exit point had been reached with the demonstrably successful turnaround. However, the next stage of development, which includes the establishment of new sales structures and the development of new target markets, requires measures whose effects will only become visible after a few years. At this point, a strategic investor is better positioned than Blue Cap, as it can use existing structures and synergy potential to drive forward further development more efficiently and with less risk.
At the beginning of this year, the Blue Cap and Neschen teams therefore focused on ensuring exit readiness and safeguarding the success of the transformation during the M&A process. At the end of the structured process, we were able to achieve an excellent result in a still challenging environment by selling our 100% investment to ATP adhesive systems AG, a strategic investor. The total proceeds (before taxes) are in the double-digit million range and around 10% above the net asset value valuation as at June 30, 2024. The sale generated a very attractive return on invested capital (internal rate of return) of 44% per year and a money multiple on the capital employed of around 8x.
Buyer expands its product portfolio with the acquisition of Neschen
ATP adhesive systems AG specializes in the development and manufacture of customer-specific adhesive tape solutions. With production sites in Germany, the USA and the United Kingdom as well as its headquarters in Switzerland, ATP serves a wide range of industries and offers customized adhesive solutions that meet the highest standards of sustainability and quality. With this strategic acquisition, ATP is expanding its production capacities and opening up new markets with an increased product range. On the other hand, the company strengthens its position as a leading provider of environmentally friendly adhesive technologies, as both Neschen and ATP have a strong focus on sustainable products. We are confident that ATP is the perfect new owner for Neschen and wish both companies all the best for their future together.