HgCapital’s investment in German lighting specialist SLV has all the hallmarks of a classic private equity investment, allowing a founder owner to realise a profit from years of hard work, and supporting the business in the next stage of its growth.
Following the acquisition in 2007, SLV proved extremely resilient through the financial downturn, driven by market share gains, a highly scalable platform, cost discipline and control over its value chain. Under HgCapital’s ownership, SLV became a stronger and even more competitive company, expanding into many new geographies and growing jobs, benefiting its employees, its customers and its investors. HgCapital sold SLV in 2011.
SLV is a very good example of how HgCapital added value to an already successful growth business and German 'hidden champion'.
Justin von Simson Partner, HgCapital
What did the business need?
- A supportive partner to the management team to harness the business’s potential
- Professionalisation and establishment of the processes and functions necessary to take SLV to the next level of its development
- Support for international expansion
How did private equity backing create lasting value?
- Supported management in acquiring majority shareholdings in international distribution partners, gaining control over the marketing and sales activities
- Successfully entered the attractive US market, developing an entry strategy, hiring a high-quality local CEO and setting up the organisational structure
- Supported market entries in several additional European countries including Turkey, Hungary, Slovenia, Finland, Portugal, Bulgaria and Ukraine
- Invested in operational improvement by expanding headquarters, warehouse space and equipment to increase logistical efficiency
- Hired an experienced CFO
- Helped to establish more robust reporting processes
What outcomes did private equity investment achieve?
- SLV’s EBIT increased by 50% in between 2007 and 2010
- Already healthy margins were further improved
- Revenues grew by an average of more than 10% per annum
- Increased the number of employees from around 155 in 2007 to 230 in 2010