SCHWABHAUSEN, Germany, April 24, 2018 /PRNewswire/ --
Within the scope of its M&A strategy, NorthCapital Holding ApS today acquired Starz Group, the leading manufacturer of cable sets for special vehicles. In mid-January, the company had to file an insolvency petition due to, among other reasons, investments in China which required high financial advances. Operational activities in Germany are, however, still profitable.
NorthCapital Holding ApS is an international investment company with its registered office in Copenhagen, Denmark. It is primarily active in the fields of gemstones, oil and gas. However, the company also invests in companies of the financial and production sector. Thus, within the scope of its merger & acquisition strategy, the company today acquired Starz Group with its registered office in Großräschen, in Brandenburg, Germany, including its foreign companies in Europe, North Africa and China. The group of companies that ran into financial difficulties manufactures and develops cable harnesses, control electronics and control panels for special vehicles, in particular for construction, agricultural and forestry machines, but also for municipal and fire-fighting vehicles.
"We invest in a company that is essentially profitable. The name recognition and the excellent reputation of Starz Group with regard to well-known international industry customers, but also the attractive location near Cottbus, Germany, are a good basis to again sustainably increase the business volume and profitability. Therefore, highly attractive for financial investors who pursue a buy-and-build strategy like we do!" says Werner Schmidt, Group CEO of NorthCapital Holding ApS.
Insolvency administrator Bettina Schmudde, attorney-at-law and partner of the law firm White & Case, agrees: "With NorthCapital, I found, after an intensive search for investors in Germany and abroad, an investor for Starz Group who will keep all locations of the Group. Thus, the Group and its employees get a second chance they really deserve. This is also an asset for Lusatia."
Attorney-at-law Schmudde had started the international search for financially strong investors for Starz Group with its companies in Germany, Poland, Tunisia and China already immediately after the initiation of insolvency proceedings and her appointment as a temporary insolvency administrator.
The business of the insolvent company Starz GmbH from Großräschen, Germany, which employs approx. 170 employees, entirely continued in the meantime. The further companies of Starz Group - Starz Polska, Mecsy Tunisie, Starz Wiring System Ltd. Co. - were merely indirectly affected by the insolvency of the parent company in Germany.
Starz Group which is one of the leading manufacturers of cable harnesses for special vehicles employs in total approx. 720 employees worldwide - two thirds of them work in production. In addition to its registered office in Brandenburg, Germany, the company also runs production sites abroad. In particular when establishing the Chinese subsidiary, there were high financial burdens which could no longer be compensated for by the otherwise profitable core business.
The parties involved agreed to not disclose any information with regard to the amount of the purchase price.
Due to the high outflows of liquidity to China, Starz Group suffered a liquidity crisis that eventually resulted in the filing of the insolvency petition in mid-January 2018.
The industry environment in which Starz Group is positioned faces structural challenges. The industry for special vehicles highly consolidated in the last few years. As a result, Starz Group generated the predominant part of its sales with its Top 10 customers. In addition, the degree of automation in the production of cable harnesses is very low and thus, personnel costs are, in particular at the location in Germany, high. In the age of digitalization, there are further challenges in the organization development with regard to structures, operational and IT processes.
On the other hand, however, these framework conditions in particular offer potential for investors. "Restructuring measures regarding pricing and distribution can be quickly implemented and thus sales and profitability can be increased. Focusing again on the core business of cable packaging can then sustainably contribute to the company's success. We are confident that we will soon achieve positive results," says Werner Schmidt.
With regard to the restructuring of Starz Group, the team of White & Case consisted of partner Bettina Schmudde, Counsel Dr. Tim Brune and Associate Norwin Baczako (all Restructuring & Insolvency, Dresden, Germany).
The international investor process was exclusively supported by Restrukturierungspartner jwt GmbH & Co. KG, Berlin, Germany.
About White & Case
White & Case is one of the leading international law firms and has offices in the most important economic centers of the world at 41 locations in 30 countries. In Germany, approx. 200 attorneys-at-law, tax consultants and notary publics work for the law firm in Berlin, Düsseldorf, Frankfurt am Main and Hamburg (http://www.whitecase.com ). For more than 30 years, the law firm has had one of the most prestigious insolvency and restructuring offices in Germany (http://www.whitecaseinso.de ).
About NorthCapital Holding ApS
NorthCapital Holding ApS is a global investment company with its registered office in Copenhagen, Denmark. NorthCapital Holding ApS is primarily active in the fields of gemstones, oil and gas as well as investments (mergers & acquisitions) in companies of the financial and production sector.
SOURCE NorthCapital Kontor GmbH