Canada Pension Plan Investment Board (CPP Investments), through its wholly owned subsidiary, CPP Investment Board Europe, and BC Partners, an international investment firm, are to to jointly acquire CeramTec, from existing owner BC European Capital X (BCEC X) and its co-investors.
CeramTec is a high-performance ceramics specialist and global MedTech business. On completion of the transaction, CeramTec will be jointly owned by CPP Investments and BC Partners Fund XI (BC XI).
CeramTec is a leading global MedTech platform and provider of high-performance ceramics for medical implants and bespoke industrial solutions, with 21 production sites and over 3,500 employees across 11 countries. With a well-diversified product portfolio of more than 20,000 units, the Company is active in two business lines: the medical business, which produces orthopaedic and dental ceramic implant components, and the industrial business, which focuses on highly specialised, mission-critical high-performance ceramics solutions.
Since BC Partners’ initial investment in March 2018, CeramTec has significantly extended its product development pipeline, undergone a programme of operational improvement, and accelerated its transformation into a diversified MedTech platform, including through the recent acquisition of Dentalpoint, a fast-growing technology leader in the field of ceramic dental implants.
The new ownership structure reflects both CPP Investments’ and BC Partners’ confidence in CeramTec’s business model and future growth prospects, and provides the opportunity to realise additional value. The shareholders will support CeramTec as it expands its leading position as a diversified MedTech platform, driving ongoing product development and strategic M&A in a sector underpinned by strong secular growth trends.
Hafiz Lalani, Managing Director, Head of Europe, Direct Private Equity, at CPP Investments, says: “We are pleased to support the next stage of CeramTec’s growth in this attractive global market, in partnership with the Company’s best-in-class management team and BC Partners, who bring deep sector knowledge. CeramTec’s unique MedTech products optimise patient outcomes, improving the lives of millions of people worldwide, and provide us with an opportunity to deliver solid long-term risk-adjusted returns for CPP contributors and beneficiaries.”
Under the new ownership structure, CPP Investments and BC XI, together with co-investors, will each hold a 50 per cent stake in the Company. The capital contribution by CPP Investments in CeramTec will be approximately EUR800 million. Existing investors the Public Sector Pension Investment Board (PSP Investments) and Ontario Teachers’ Pension Plan Board (Ontario Teachers’), which invested in CeramTec as part of a consortium alongside BC Partners in March 2018, will exit their direct investments.
Raymond Svider, Chairman of BC Partners, says: “We are delighted to be working again alongside CPP Investments as we continue our partnership with CeramTec, a high-quality business that we believe continues to have significant growth potential. Over the past three years, CeramTec has significantly extended its product development pipeline, undergone a programme of operational improvement and undertaken strategic M&A to diversify its offering and broaden the platform, to ensure the company remains at the forefront of the sector. We look forward to working with our new partners as we support Dr. Hadi Saleh and the rest of the management team in further consolidating CeramTec’s position as a high-growth, MedTech market leader globally.”
Dr Hadi Saleh, Chief Executive Officer of CeramTec, says: “We are excited to continue working with the team at BC Partners, whose support since 2018 has enabled us to successfully expand our product range as we diversify our MedTech footprint. Moreover, we are delighted to welcome our new partners in CPP Investments, whose sector expertise and strategic counsel we have already been impressed by. We believe that together we are well-positioned to continue working towards our aim of being the undisputed global leader in high-performance ceramics in the eyes of our customers.”
Bank of America and Morgan Stanley & Co International plc acted as financial advisers to BCEC X, PSP Investments and Ontario Teachers’. Nomura acted as adviser to CPP Investments.