Every day counts - Deutsche Beteiligungs AG

MANAGEMENT BUYOUTS –
PARTNERSHIPS FOR PERFORMANCE
Deutsche Beteiligungs AG · Annual Report 2002/2003
Corporate Review – Investments Management Buyouts
Majority holdings are the focus of our investment strategy.
Management buyouts – the type of majority investments
we prefer – constitute our key business field. We expect this
business to generate the highest earnings in the future.
“Majority” does not necessarily mean that Deutsche Beteiligungs
AG must own the majority alone: our co-investment
funds invest alongside our activities and we frequently combine
efforts with other financial investors pursuing similar
goals. One example is Casco Surfaces, the first management
buyout we entered in 2002/2003. Two other transactions in
this business field which were contracted in 2002/2003 have
meanwhile been completed.
Our paramount objective is to build the value of our investments. The position of a
majority shareholder allows us to best reach that goal. A majority shareholder can decisively
influence an enterprise’s development. We seek to have earnings growth outpace
sales growth in our investee businesses, and we aim to enhance our investee businesses’
strategic positioning. These entrepreneurial activities vindicate our expected returns.
The successful realizations completed this past year are proof that these objectives are
attainable.
At the end of the 2003/2003 financial year, the business field of management buyouts
totaled 116.1 million euros at acquisition cost, or approximately 38.7 percent of
the portfolio. Compared with the previous year, this represents a slight decline – resulting
from the sale of Edscha AG and Global Power Equipment Group Inc. as well as the
partial realization of our holding in Andritz – at the balance sheet date. At the date of
writing this report (December 31, 2003), all three management buyouts contracted in
2002/2003 have meanwhile been completed, and, currently, the largest part of the portfolio,
or more than 40 percent, is attributable to management buyouts. The average
investment sum per MBO rose from 6.94 percent to 7.26 percent (October 31, 2003).
FY 2002/2003
FY 2001/2002
FY 2000/2001
38.7 %
36.4 %
40.1%
Share of MOBs in
total portfolio
33