KKR initiates sale of DCC

Kohlberg Kravis Roberts (KKR), the US buyout firm, has sent out a separate sales memorandum for Demag Cranes & Components (DCC), according to an industry source. DCC is believed to generate revenues in excess of €650m.

It was previously reported that KKR was pursuing a dual-track strategy of gauging support for an IPO of all the hoist and crane manufacturing units of Demag Holding while inviting bids for a sale. The subsidiaries that were thought to be involved include Demag Cranes & Components, Wetter, and Gottwald Port Technologies, which are said to generate combined revenues of €880m and Ebitda of about €85m. Investment banks Lehman Brothers and Goldman Sachs were touted to be handling the exit plan.

KKR acquired DCC in 2002, when it bought seven businesses from Siemens for a transaction value of €1.69bn. Besides DCC, the other businesses acquired in the course of the transaction comprised Mannesmann Plastics Machinery (injection moulding), Gottwald Port Technology (harbour logistics solutions), Stabilus (gas springs and hydraulic dampers), Network Systems, (network integration services), Metering (electricity and heat meters) and Ceramics. The seven businesses had a combined turnover of about €3.5bn.

Although owned by a common holding company formed for this acquisition, each business is managed separately. KKR owns 81% of the Luxembourg-based holding company, called Demag Holding, with Siemens retaining a minority investment of 19%.

KKR was not available for comment.

Alex Wessendorff