KKR, Goldman Sachs in largest German leverage buyout
Kohlberg Kravis Roberts & Co and Goldman Sachs Group Inc’s private-equity unit agreed to buy the Kion forklift division of Linde Group for 4 billion euros ($5.1 billion) in Germany’s biggest takeover by a leveraged buyout firm.
KKR and Goldman may hold an initial public offering for Kion, where pretax profit grew 31% last quarter, they said in a statement on Monday.
The purchase price includes 400 million euros in pension commitments, lease obligations and other liabilities.
Kion plans to sell more than 1,25,000 forklifts to ports and warehouses this year as US and European demand for low-cost Asian goods boosts world trade by an estimated 7%. Wiesbaden, Germany-based Linde will use cash from the sale to help finance its $15.2 billion purchase of BOC Group Plc, a deal that made it the world’s biggest maker of industrial gases.
“Linde had to sell and this is good opportunity for them to get some money,’’ said Francois de Rambuteau at Cholet-Dupont Gestion in Paris, which manages $2.3 billion, including shares of Linde. “They have sold it at a high price so it is a very good deal for them. It’s totally in-line with their strategy and they are possibly selling at the top of the cycle.”
Shares of Linde rose as much as 1.14 euros, or 1.5%, to 77.34 euros and were trading at 76.96 euros as of 11:28 am in Frankfurt. The stock has gained 23% percent so far this year, giving the company a market value of 12.1 billion euros.
The takeover comes after private-equity firms announced a record $173 billion of deals so far this year in Europe, up from $93 billion in the equivalent period last year.
KKR, based in New York, is investing a 4.5 billion-euro European fund it raised last year. In Germany, today’s deal tops New York-based Blackstone Group LP’s purchase of a 2.7 billion-euro stake in Deutsche Telekom AG in July this year.
KKR’s investments in Europe’s biggest economy include crane maker Demag Cranes AG, which it took public in June this year, and MTU Aero Engines Holding AG, a maker of engines for planes. Kion had sales of 3.6 billion euros last year and is the world’s second-largest forklift maker with a 19% market share, Linde spokesman Uwe Wolfinger said.
Toyota Motor Corp ranks No 1, with a 21% share, he said. The unit has been sold to “a strong and strategically oriented partner, who will facilitate a seamless transition,” Linde CEO Wolfgang Reitzle said.
The KKR-Goldman bid was one of four in the final reckoning, Wolfinger said, declining to specify if any trade buyers had submitted offers. The strong interest meant a sale made more sense than an IPO, with the price at the “top end” of analyst estimates, he said.“Linde timed this just right,” said Richard Schramm, an analyst at HSBC Trinkaus & Burkhardt KGaA, which has a ‘‘neutral’’ rating on shares of the German company.
—Bloomberg
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