Financial leverage enables investors to generate higher returns on their investment and at the same time to offer a higher valuation to the entrepreneurs who are selling their business. Therefore, in addition to engaging our own funds in companies, we also secure bank financing.
Our buyouts supported by bank debt, so-called leveraged buyouts or LBOs, have included the takeovers of Danwood, Harper Hygienics and NordGlass.
Danwood produces energy-efficient houses from prefabricated elements using modern technology that is popular in Germany and Scandinavia. The company’s headquarters, production plant, and design and research department are located in eastern Poland.
Danwood sells most of its output to Germany and other German-speaking countries, as well as to the UK and Poland. The company controls all key areas of the value chain, from design through production and sale of prefabricated elements, construction and finishing. We invested in Danwood because we were convinced that the energy-efficient housing market would grow rapidly. What drew our attention was the high quality of the product, Danwood’s efficient and dedicated management team, and the company’s leading position in Germany. In 2013 we acquired 100% of the business from Budimex Group as a carve-out transaction of a non-core asset. Danwood’s sound foundations and healthy cash flow allowed us to optimize the financing structure by leveraging the transaction.
Today, Danwood’s energy-efficient houses are conquering new markets in Europe. Thanks to its excellent financial condition the company can look for potential add-on acquisitions that will continue to boost that growth.