3i invests in Formel D to support international growth
3i Group plc (“3i”) today announces that it has agreed to invest up to €247m in Formel D.
3i Group plc (“3i”) today announces that it has agreed to invest up to €247m in Formel D, a global service provider to the automotive and component supply industry, headquartered in Germany.
3i is investing alongside management and is purchasing the business from listed Deutsche Beteiligungs AG (DBAG) and DBAG Fund V, a private equity fund managed by DBAG. 3i intends to introduce co-investors, who have been working alongside 3i on the transaction, post-closing with the view to reducing its total investment to c. €150m.
Founded in 1993 and headquartered in Troisdorf, near Cologne, Formel D develops leading solutions for quality assurance and process optimisation for automotive customers. Through its range of testing and inspection services for individual parts, systems and vehicles, Formel D is an important player in the automotive value chain. The service portfolio spans development to production through to aftersales. Formel D ensures that only tried, tested and flawless cars and trucks are put on the road.
Formel D’s customers include premium automotive manufacturers such as BMW, Daimler, VW and Audi, with whom it has long-standing, trusted relationships. The company has over 7,000 employees and operates more than 80 facilities in 19 countries, with 50% of revenues generated in Germany, 25% in Europe (excluding Germany) and 25% across the Americas and Asia.
Formel D has a strong track record and has outperformed the market over the last 10 years, growing at an average of 17% p.a. Formel D differentiates itself through its global scale, its premium customer relationships and its comprehensive service offering: it is the only player offering quality services along the entire automotive value chain. It represents an attractive international growth opportunity through rolling out its existing services to clients in other geographies, expanding its client base in Asia, and increasing its higher “value add” services such as vehicle test specification and virtual testing.
Ulf von Haacke, Partner & Head of Industrial at 3i Germany, commented: “We are really excited to be working with Formel D. While it has already built a global presence, 75% of revenue still comes from within Europe, so there is clear potential for the business to grow with its existing clients in the US and Asia. In this fragmented market, we see significant growth opportunities through M&A.”
Dr Holger Jené, Managing Director of Formel D in charge of Asian-Pacific and European regions, said: “We are delighted to be partnering with 3i. It can draw on extensive experience and a network of valuable industry experts in the testing and automotive sectors. This expertise will support Formel D’s growth path.”
Dr Juergen Laakmann, Managing Director of Formel D in charge of Germany and the Americas regions, added: “3i has a long track record of helping businesses to expand internationally and we feel it is the ideal partner for us at this point in our company’s development.”
For further information, contact:
3i Group plc
Tel: +44 20 7975 3258
Kathryn van der Kroft
Tel: +44 20 7975 3021
Notes to editors:
About 3i Group
3i is a leading international investment manager focused on mid-market private equity and infrastructure. Its core investment markets are northern Europe and North America. For further information, please visit: www.3i.com.
About Formel D
Formel D is a global service provider to the automotive and component supply industry. The company develops concepts and scalable solutions for quality assurance and process optimisation along the entire automotive value chain - from development to production through to aftersales. Headquartered in Troisdorf near Cologne, the company was founded in 1993 and has over 7,000 employees at 80 locations in 19 countries worldwide. The company is managed by the Managing Directors Dr. Holger Jené, Dr. Jürgen Laakmann and Claus Niedworok.
This transaction involved a recommendation of 3i Investments plc, advised by 3i Germany.