Aurelius Equity Opportunities has sold its subsidiary SECOP to the Nidec Group headquartered in Kyoto, Japan.
At a sales price of EUR185 million, this is the largest company sale in Aurelius’ history.
The transaction is subject to the approval of the competent authorities and is expected to close in the coming months.
With the sale, Aurelius increases the capital it invested in SECOP by a multiple of approximately 11x. The transaction will have a positive effect on Aurelius’ 2017 group profit of EUR100 million.
The combination of the transaction and advanced plans for further disposals in the coming months has prompted the executive board to double its dividend proposal to the AGM to EUR4 per share (EUR1 base dividend plus EUR3 participation dividend per share), from previously EUR2 per share (EUR1 base dividend plus EUR1 participation dividend per share).
“As a global technology leader, SECOP is a perfect example of the successful strategic realignment of a group spin-off under Aurelius’ ownership. We are particularly proud that, in this transaction, we exceeded the average cash multiple achieved for past exits,” says Dirk Markus, CEO of Aurelius Equity Opportunities.
SECOP is a global provider of specialised compressors for refrigeration and freezer appliances operating in the “household” and “light commercial” segments. SECOP’s Household division is a leading provider of compressors for refrigerators and freezers in Europe. In its Light Commercial division, the company is selling compressors for Commercial applications such as frozen goods counters in supermarkets and hermetic DC compressors such as those used in cooling units in trucks. In all areas, the company benefits from the ongoing trend towards energy efficiency and sustainable refrigerant technologies.
In 2010, Aurelius took over the Household Compressors business division from the Danish Danfoss Group as part of a group spin-off. At the time, the business was focused on commodity compressors and generated negative earnings. Aurelius has since made on-the-ground efforts to develop SECOP into a profitable high-tech niche player focusing on energy-efficient compressors: in the past seven years, substantial resources were invested in the development of new compressor platforms and in optimising production processes.
To improve competitiveness, the company underwent an extensive alignment of its cost base. Measures included consolidating European production locations in Slovakia. The takeover of the Austrian compressor manufacturer ACC Austria in December 2013 allowed Aurelius to strengthen the company strategically and in a targeted manner and to expand its market position. This add-on acquisition was Aurelius’ largest to date and resulted in a combination of technological competencies of two previously separate worlds. A focus on electronically controlled compressor platforms in all business areas allowed Aurelius to transform SECOP into a globally recognised specialist. The result of focusing on energy-efficient compressors was an average annual revenue growth (CAGR) of 60 per cent in the XV variable-speed compressor product line, whose energy efficiency is up to 40 per cent higher compared to competing technologies.
By setting up dedicated sales organisations in growth markets such as North America and China as well as converting the existing sales organisation and introducing new sales processes and systems, it was possible to win new customers and improve market penetration significantly.
For the Nidec Group, a provider of electric motors as well as components and accessories, this acquisition means a considerable broadening of its product portfolio with sizeable synergy potential. Nidec has already grown non-organically in the past by acquiring and integrating products and technologies.
