3i backs DEUTZ Power Systems
3i has backed the management buyout of German gas and diesel engine manufacturer DEUTZ Power Systems (DPS) from DEUTZ AG in a €360m deal.
The transaction remains subject to the approval of DEUTZ AG’s supervisory board as well as the antitrust authorities.
The product portfolio of Mannheim-based DPS includes engines which convert natural and special gases into power, heat, or cold. Its efficient and environmentally-friendly power generating systems are used in bio-fuel and landfill gas facilities, as well as in complex combined heat and power plants.
By bringing the equipment and service activities close together, 3i and DPS management aim to grow the company into the sole global independent system specialist for gas engines for decentralised power generation. To this end, DPS will strengthen areas such as its research and production facilities in Mannheim and, from there, will expand into new markets in Asia and Eastern Europe. The company also plans to make acquisitions strengthening the core business or in the areas of packaging and distribution.
“With its high technological expertise, DEUTZ Power Systems is very well positioned in a growing global market,” said Peter Wirtz, Director at 3i Germany. “With our international network, we will support DEUTZ Power Systems’ management team in driving the planned growth of the business in new markets. Together with management, we have agreed on strategic milestones DPS should achieve going forward. The expansion of research facilities in particular is necessary for further growth.”
Gordon Riske, chief executive of DEUTZ AG, added: “We are pleased to place DEUTZ Power Systems in the hands of an investor with many years of experience in the engineering sector. The market for decentralised power generation has immense growth potential. Independently developing DEUTZ Power Systems is the ideal way to realise this potential.”
Notes to editors
About DEUTZ AG
With annual revenues of around €1.5bn, DEUTZ is one of the global leading independent manufacturers of diesel and gas engines in the 4 to 4000 kW power range. Its products are used in construction machinery, energy generation plants, farm machines, commercial vehicles, rail cars and ships. DEUTZ’s customers are served by 16 distribution companies, 12 sales agencies, 16 service centres and more than 800 distribution and service partners in more than 130 countries worldwide.
3i is a world leader in private equity and venture capital. We focus on Buyouts, Growth Capital, Venture Capital, Infrastructure and Quoted Private Equity (“QPE”) and invest across Europe, the United States and Asia. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.
The 3i European Buyout Business is a leader in the European mid-market. We lead mid-market buyouts up to €1bn using insight from our local knowledge, international connections, and our sector teams. Managing €3bn invested in over 60 companies across Europe, the business invests in all sectors, with a particular focus on media, healthcare and business support services. 3i recently raised a €5bn fund, the largest fund in Europe dedicated to mid-market buyouts. ‘Eurofund V’ will be invested in buyout transactions over the next four years, primarily in Europe.