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KPS Capital Makes Strategic €3.5 Billion Acquisition of Innomotics to Revolutionize Energy Efficiency


Robert Tavares

May 16, 2024 - 05:08 am


Powering Innovation: KPS Capital's Monumental Acquisition of Innomotics

NEW YORK, May 16, 2024 /PRNewswire/ -- KPS Capital Partners, LP ("KPS"), a foremost player in the investment realm, has proclaimed the signing of a definitive agreement under a newly formed affiliate to acquire the trailblazing entity, Innomotics GmbH ("Innomotics" or the "Company"), from its previous owner, Siemens AG ("Siemens") (XTRA: SIE). The purchase is locked in with an enterprise value of an impressive €3.5 billion. With an expected completion schedule set for Q4 2024 or Q1 2025, this transaction hinges on customary closing conditions and approvals.

Innomotics: Synonymous with Technological Mastery in Electric Motors

Innomotics is renowned as a pivotal global supplier, responsible for mission-critical electric motor and sizable drive systems that elevate and maximize customer processes, uptime, efficiency, and profitability. This company crafts an inclusive portfolio of low voltage motors, high voltage motors, medium voltage drives, and supplementary components. It also delivers value-added customer services and solutions. Serving substantial, technically sophisticated end-markets, Innomotics has both the engineering expertise and an industry-leading performance history of successful projects.

A Vision for the Future: Innomotics Redefines Energy Efficiency and Sustainability

Through its product offerings and services, Innomotics stands at the vanguard, ready to meet the most rigorous customer demands. It significantly contributes to energy savings, emphasizing decarbonization and sustainable practices. With the heart of its operations in Nuremberg, Germany, and a workforce of approximately 15,000 people, this manufacturing giant commands an imposing revenue estimate of €3.3 billion annually. Its extensive reach is underlined by 16 manufacturing sites distributed strategically across the EMEA, Americas, and Asia-Pacific regions.

Michael Psaros on Innomotics' Strategic Acquisition

Michael Psaros, a figure of innovation and a Co-Founder and Co-Managing Partner at KPS, espoused the acquisition of Innomotics with fervor, envisioning it to be a flourishing stand-alone entity. He remarked, "Innomotics is a global industry front-runner with an unbroken record of technological innovation spanning 150 eventful years. KPS is essentially investing in the 21st-century future through Innomotics. The company is supremely positioned to capitalize on the international megatrends such as electrification, energy efficiency, digitalization, urbanization, and the commercialization of revolutionary energy resources, including hydrogen."

Psaros highlighted the KPS commitment to vigorously accelerate business growth and value creation and offered appreciation to Siemens for entrusting them with such a prized and emblematic heritage establishment as Innomotics.

A Demonstration of the Potency of KPS in Europe, articulated by Psaros, is evident in its recent activities. Since 2020, KPS has exhibited remarkable prowess by acquiring or committing to the procurement of 17 businesses that cumulatively exceed a value of $11.5 billion from premier corporate vendors based in Germany, Belgium, Italy, Ireland, Norway, Switzerland, and the United Kingdom.

The New Era for Innomotics Under KPS Leadership

Michael Reichle, Innomotics' Chief Executive Officer, conveyed his confidence in KPS, citing its recognized history of manufacturing excellence and global footprint as making it the ideal bosom for the future Innomotics. Reichle expects to maintain a legacy of technological progression and to continue providing paramount products, solutions, and services to their clients.

Elucidating further, Reichle voiced his enthusiasm for partnering closely with KPS and the talented Innomotics team to propel significant customer value worldwide and bolster the company's strong technological foothold. Reichle foresees Innomotics benefiting from the exponential growth potential driven by the enduring demand for top-tier efficiency in electrification and energy consumption, rooted in industrial developments and the overarching societal realm.

KPS and Innomotics: A Collaborative Path Ahead

Paul Weiss, Rifkind, Wharton & Garrison LLP, and Gleiss Lutz stood steadfast as legal counsel while Bank of America and Lazard provided financial advice to KPS for this transaction. Commitments for debt financing support have been garnered from revered institutions that include Barclays, Citibank, Goldman Sachs, Intesa Sanpaolo, Morgan Stanley, MUFG Bank, Standard Chartered Bank, UBS, and UniCredit, reflecting the broad-spanning endorsement and trust in this significant deal.

The Power of Innovation: An In-Depth Look at Innomotics

Innomotics GmbH's reputation as a global leader in the electric motor and large-drive systems sector is built on a robust foundation of profound engineering expertise blended with pioneering innovations. With the backing of an engineering legacy that crosses a century-and-a-half, Innomotics has been a keystone in the infrastructure of many industries worldwide.

As a constant innovator, Innomotics aims to scale up industrial efficiency, electrification, and digitalization, while foregrounding sustainability and decarbonization. The operational center in Germany is a testament to the company's deep-rootedness in Siemens' lineage. Utilizing 16 factories and a comprehensive sales and service network, Innomotics assures an equilibrium in its global footprint within 49 countries, in what is revealed to be a resilient and growing market.

For those seeking further insight into Innomotics’ strides in revolutionizing the electric motor and drive systems industry, additional information is readily available at the official Innomotics website.

About KPS Capital Partners, LP: Building Industrial Titans

KPS Capital Partners, LP, manages the KPS Funds, a family of investment entities that collectively hold an asset under management fortune of about $21.4 billion as of December 31, 2023. KPS has single-mindedly pursued significant capital gains by taking controlling equity positions in manufacturing and industrial companies worldwide. The sector spread of these endeavors encompasses basic materials, branded consumer, healthcare, luxury items, automotive components, capital equipment, and broader manufacturing.

KPS stands out by structurally enhancing the strategic positioning, competitiveness, and profitability of its portfolio companies. This is achieved not as much through financial leverage as through constructive collaboration with proficient management teams. Statistics speak volumes of its success, with KPS portfolio entities collectively driving annual revenues of about $20.3 billion, operating 222 manufacturing sites in 26 countries, and providing livelihoods for 48,000 employees globally, as disclosed on December 31, 2023. Encapsulating the KPS investment ethos and its portfolio can be experienced in detail at the KPS Fund website.

KPS in Germany: A Testament to Ingenuity and Entrepreneurial Spirit

KPS has made remarkable inroads in Germany, with its European headquarters nestled in Frankfurt. It has purchased businesses from some of Germany’s crucial industry players. The acquisition roster includes Chassis Brakes International from Robert Bosch GmbH and Waupaca Foundry from thyssenkrupp AG. Further, TaylorMade emerged from a deal with adidas AG, and the impending acquisition of Sport Group from Equistone Partners is on the horizon.

Monitor Coach Industries has solidified a strategic relationship and minority ownership with Daimler AG in the North American coach business, marking one of several symbiotic relationships that KPS has nurtured. With a cumulative revenue of €2.0 billion and nine manufacturing facilities in Germany, KPS's effective workforce surpasses 5,200, excluding the promise of the Sport Group and Innomotics acquisitions.

Siemens AG: A Pillar of Innovative Technology

As a leader in technology with a focus on pivotal sectors such as industry, infrastructure, transportation, and healthcare, Siemens is the progenitor of technological solutions designed to enrich resource efficiency. Embodying the remarkable synthesis of the real and digital spheres, Siemens is an empowering force for its clientele, revitalizing industries and markets. Not only does Siemens hold a majority interest in the publicly traded Siemens Healthineers, a dominant force in medical technology, but it also engages in constructing the foundation for future healthcare innovation.

During the fiscal year of 2023, which drew to a close on September 30th, Siemens Group boasted €77.8 billion revenue and net income of €8.5 billion. The company also reported a strong workforce of around 320,000 people worldwide, each contributing to technology that enriches lives daily. More comprehensively detailed information is accessible at the official Siemens website.

Looking Ahead: Forward-Looking Statements and Caution

This press release may contain certain projections and anticipations regarding the upcoming transaction known as "forward-looking statements." Such statements are typified by the expression of expectations, guesses, and presumptions about future events. However, actual results could differ materially due to various changing assumptions, risks, and uncertainties. It is essential for readers to recognize that such prospective results are subject to fluctuation and may not materialize as projected.

In conclusion, the culmination of this definitive agreement between KPS and Innomotics heralds a new chapter marked by the expectation of acceleration in industrial growth, technological innovation, and a footprint that promises efficiency and sustainability at its core. The earnest anticipations of both Innomotics and KPS reflect a shared commitment to a future where the electrification and digitalization of industries lead the charge in global markets.

SOURCE: KPS Capital Partners, LP