IK Investment Partners acquires Axtone from Advent International

London & Warsaw – Advent International, the global private equity firm, today announced agreement to sell Axtone S.A. (www.axtone.eu), Europe’s largest rail freight buffer manufacturer, to the Pan-European private equity firm IK Investment Partners (“IK”). Terms of the agreed sale, which is subject to regulatory approval, were not disclosed.

Advent acquired Kamax, a mid-sized Polish business, in January 2006. The company was at that time a Polish-based market leader in rail wagon buffers, coupling and shock absorber manufacture and maintenance, with an excellent engineering base and strong presence in Russia, but struggling to gain traction in Western Europe.

Advent simultaneously purchased Keystone Bahntechnik, the German market leader in rail wagon buffers, crash systems and coupling devices, supplying OEMs across Europe and the Middle East. Both businesses were rapidly integrated. The combined group, renamed Axtone, created Europe’s biggest company in the sector, headquartered in Kanczuga, Poland. Marcin Kowalczyk, a former senior executive at ABB, as CEO of Axtone to lead management and the 600-strong workforce in successfully consolidating both companies and expanding the business across Europe and in Asia.

Axtone achieved growth in both Western Europe and the world’s most rapidly growing rail markets, including Russia, Ukraine, China and India. Turnover for Kamax on acquisition was 24 million euros and the combined companies had turnover of 49 million euros in 2006. Axtone anticipates turnover this year in excess of 70 million euros.

The transaction is IK’s first direct investment in the region and marks the start of the firm’s plans to invest directly in Poland, Czech Republic, Slovakia, Hungary and the Baltic States, in addition to its operations in Benelux, France, Germany and Scandinavia.

Axtone is also IK’s first investment in the railway industry, at a time when demand for rail transport products and services is expected to benefit from more global trade using rail, driven by increased rail infrastructure investment, environmental priorities and high-fuel costs.

Detlef Dinsel, Managing Partner responsible for Germany and the CEE region at IK, said: “We are delighted to acquire Axtone, a leading European supplier to the rail industry in Poland and Germany. We are looking forward to working jointly with Axtone management in further developing the company into a global leader for shock absorption technology for railways. Our intention is to apply IK’s successful buy-and-build strategy and to capitalise on growth opportunities as rail networks are expanded and modernised in many countries. This transaction represents IK’s first direct investment in the growing CEE region and we are very excited about the prospects of being an active investor in such a dynamic region.”

Monika Morali-Efinowicz, Head of Advent International in Poland, commented: “Together with Axtone’s management, we have implemented a successful growth programme and transformed a mid-sized Polish company into a market leader in both Eastern and Western Europe, with a developing business in the key markets of Russia, India and China. Axtone demonstrates our ability to accelerate growth in CEE companies, particularly when that growth involves international expansion, access to new markets and technologies.”

Advisers to Advent were: Close Brothers (M&A), Clifford Chance (legal), Ernst & Young (financial and tax), Environ (environmental) and LEK (commercial).  Advisers to IK were: Société Générale (M&A, Freshfields (legal); Clifford Chance (legal financing), BCG (commercial), E&Y (financial), Unicredit (Austria Creditanstalt) (financing), Golder (environmental), Marsh (insurance).

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For further information, please contact: 
Charlotte Laveson, Communications Manager for IK
+46 8 678 95 51