Primary’s sale of Napier Turbochargers to NYSE listed Wabtec Corporation has been named Mid-Cap Deal of the Year at the 2014 Private Equity Awards hosted by Real Deals last week.
Napier, which was acquired by Primary in June 2008 from Siemens Industrial Turbomachinery Limited, a subsidiary of Siemens AG, generated an impressive return of 5.5x cost of investment for Primary. The deal was yet another high returning exit for Primary, with more than 50% of all Primary exits since inception having returned over 3.5x cost of investment.
When selecting the winner, the judges were specifically looking for evidence of the GPs role in helping to create value and contributing to the strategic development of the business and were impressed by the strategic repositioning Primary and management had undertaken following the acquisition. This included a complex separation of Napier from Siemens within the first 18 months of the transaction, which involved a complete physical separation with options which progressively allowed Napier to achieve a completely separate, stand-alone facility and to expand the factory footprint by over 70%; establishment from scratch of an entirely new, stand-alone IT and MIS infrastructure; and completion of a stand-alone management team.
Significant investment was also made in re-establishing the 200 year old Napier heritage brand, opening new aftermarket service centres for the repair and service of turbochargers in new geographical locations to strengthen global coverage, and a doubling of R&D expenditure from that under Siemens ownership which accelerated the launch of a new product series incorporating ground-breaking technology which emphasised Napier’s technology leadership position in the market. In addition the engineering department was re-focussed on progressive launches of new, leading-edge products delivering improved performance to the customer. As well as delivering clear customer benefits, this also gave the opportunity to increase prices and margins for Napier. This also included the extension of the Napier product range into larger product sizes, a segment previously monopolised by ABB.
Following these measures, and others implemented by Primary during its ownership, Napier had been strategically repositioned to attract interest from international buyers, and a formal sale process was launched at the end of October 2012 and completed in January 2013 with a sale to Wabtec Corporation, the $5bn NYSE listed industrial conglomerate, for a price of $112.5 million.
Contact Jackie Adams for more information