trovus

Magotteaux

Country Belgium
Region Région wallonne
Investor IK Investment Partners

IK Investment Partners’ four-year investment in Belgian engineering firm Magotteaux is a shining example of the breadth of private equity’s added value. IK brought capital for R&D and investments;strategic analysis and advice; consultation on expansion channels – in both new geographies and market segments; improved governance; stronger financial performance; and much more besides.

In addition to providing a great return to investors in IK’s sixth fund, the investment built Magotteaux into a global leader in its field, created jobs and took the business into high-growth emerging markets. In 2011, Magotteaux moved on to the next stage of its development under the stewardship of Sigdo Koppers, a Chilean mining business.

In partnership with IK, we have been able to transform the business and are now firmly established as a worldwide leader.

Bernard Goblet CEO, Magotteaux

What did the business need?

  • Requirement to add business performance orientation to engineering culture
  • Investment in R&D and maintenance projects
  • Support for expansion into new geographies
  • Strategic guidance on where technology could be applied in other markets

How did private equity backing create lasting value?

  • Lowered sourcing costs, reduced working capital and improved on-time delivery through operational excellence plan
  • Major investment programme in both core Belgian business and overseas
  • More than 120m euro spent on R&D and expansion into emerging markets such as Thailand and India
  • Identified mining as a crucial new sector to target
  • Overhauled approach to health & safety, halving man hours lost
  • Introduced several new products

What outcomes did private equity investment achieve?

  • 15% increase in headcount
  • One third increase in sales to ¤500m and two thirds increase in Ebitda to 66m euro
  • More than 50% of production capacity now in high-growth countries
  • In 2011, mining accounted for more than 50% of revenues and profits – significantly from 2007

€120m

investment in R&D and capex

66%

increase in Ebitda during investment period

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