Madison Capital closes acquisition of MPM

CHICAGO — It’s official: Chicago investment group Madison Capital Partners has purchased Mannesmann Plastics Machinery GmbH, in a deal announced July 5, as Madison vaults up to become the world’s largest maker of plastics equipment.

Madison picks up some of the best-known brands: Krauss-Maffei, Demag Plastics Group, Netstal and Berstorff. Madison has purchased the MPM companies from New York-based Kohlberg Kravis Roberts & Co., for undisclosed terms. MPM had sales of about 1.3 billion euros ($1.6 billion) in 2005.

The Minneapolis office of Goldsmith Agio Helms issued a July 5 news release to announce the deal has closed for Madison, its client.

Goldsmith Agio Helms, a U.S.-based private banking firm, worked with Agio International in Europe. Agio International is a joint venture between Goldsmith Agio Helms and several independent European investment banking firms.

KKR bought the machinery group in 2002 from German industrial conglomerate Siemens AG, which retained an ownership stake in MPM.

Goldsmith Agio Helms approached MPM management and arranged a series of meetings with Madison Capital. MPM is based in Munich, Germany.

Larry Gies, president and chief executive officer of Madison Capital, could not be reached for comment. A Madison spokeswoman said he was traveling in Germany and not available.

David Iverson, a managing director of Goldsmith Agio Helms who helped set up the deal, said Gies “is going to focus like a laser on this business.”

Goldsmith has a long track record with Madison Capital. The firm has completed nine transactions for Madison Capital during the past 12 years, including Madison’s recent sales of hot-runner supplier Synventive Molding Solutions Inc. last summer, extrusion equipment supplier Dynisco LLC in 2004 and API Heat Transfer Technologies, a maker of industrial heat exchangers and thermal processing systems, also last year.

In the plastics industry, most of the mergers and acquisitions have centered on packaging companies. Plastics machinery has been relatively quiet. But expect to see more action in the equipment sector, said Iverson, who works out of Goldsmith’s Minneapolis office.

“We think there will definitely be more consolidation in the United States, and particularly in Europe,” Iverson said. Goldsmith Agio Helms, he said, “is working on some other projects in plastics machinery.”

By Bill Bregar, Plastics News staff
Plastics News