Avallon MBO FUND II invests with managers, buying out over 75% of Plasma System’s shares
Avallon MBO FUND II finalises its seventh investment with the purchase of a majority stake from Plasma SYSTEM Co in Siemianowice Slaskie.
Avallon, in close cooperation with the existing management team chaired by Mr Sławomir Wawrzyniak, signed an investment agreement on 21 September 2015, detailing the particulars of the investment process.
In order to execute the transaction in a form of management buyout, there was established Plasma MBO’s SPV financed by the Group of Management and the Fund.
Plasma System is an innovative technology company, which offers services in the field of surface engineering, which uses advanced technology of laser depositing and thermal spray coating. The use of innovative technologies and advanced materials can significantly prolong life of machine parts used in all industries, which are otherwise exposed to fast wear and tear.
The company’s dynamic development was possible thanks to the EU funds assigned to research, development and investment. The company has a modern production facility, equipped with unique in Europe machinery and equipment. The company’s customers are large industrial concerns, such as Babcock Borsig Steinmüller GmbH, Bełchatów PGE GiEK Co Power Station, GDF Suez Power Station Polaniec Co, Vattenfall Heat Poland Co, Power Station Rybnik – EDF Poland Co, PGE ElPower Station Opole Co, PKE Co, Veolia Energy Lodz ARE , Doosan Babcock Energy Poland Ltd, ALSTOM Power Ltd, Arcelor Mittal Poland Co or Fan Factory FAWENT Co. From its very beginning, Plasma System’s strength has always been a unique ‘know-how’ approach, developed by a team of people with passion.
The company’s expertise is validated by various patents and protection rights.The value of the transaction has not been made public.
The transaction was coordinated by the law firm JGA from Katowice.
Sławomir Wawrzyniak, Leader of PLASMA SYSTEM’s Management Group
The rapid development of the company has been possible thanks to efficient use of the EU funds (Operational Programme of Innovative Economy) and other funds raised from investors via NewConnect. The Board of Plasma Systems believed that opportunities for further development of the company were possible through expanding into foreign markets and acquiring a friendly partner-investor. The search for one lasted for several years, but it was only when the Managers Group came up with the initiative of engaging themselves financially and the System’s previous owner decided to sell the company’s shares that it gained the form of an MBO.The factor that prompted the managers to choose the MBO procedure was a strong sense of the company’s value and the belief in its further development.
The Avallon Fund met the expectations of the Board – the most promising among other investors, it best understood the character of our company and thanks to its portfolio of existing contacts showed potential prospects of enabling us to expand both into domestic and foreign markets. Finally, these synergies as well as high morale and professionalism of the representatives of the Avallon Fund assured us of our choice.
Alexander Borek, Chairman of the Board of SYSTEM Co
The main impulse to start the search for an investor for the company was the realisation that its further development required a strong and competent partner who would aim to work closely with the management leaders, who were the main force behind building the company’s strong position.
Finding the right investor for your business is a long and complicated process, so it is worth to be well prepared and to plan it in advance. The most important elements of such a process are careful planning of all operations, including a close analysis of the finances, and employing highly qualified and competent staff who strongly identify themselves with the objectives of the company. From the company’s very beginnings, I have always been strongly involved (also emotionally) in a success of the whole project called Plasma System, and that is why it was important for me not only to maximise the value of the transaction, but also to be certain that the transfer would go into the hands of a responsible investor, who would be able to stimulate the company’s further development. A good few months of successful negotiations ensured me that Avallon was such a partner.
At this point, I would also like to thank the whole team for long-term commitment to the development of Plasma System. Without their tremendous dedication and belief in success it would have not been possible to create a high technology company so unique in Europe.
Michał Zawisza, Partner Avallon MBO FUND
The company has attracted our attention primarily because of its unique technology, which can be implemented in most industries, and its use of modern machinery. Compared with the countries of the Western Europe, North America and Asia, the Central Europe has insufficient experience in the use of surface engineering technology. The challenge of the project will be to commercialise the technologies and applications in new areas. We believe that the experience and motivation of the members of the Management Group – the partners of the Fund, are a guarantee of success. Avallon has already begun conducting market research introducing its existing contacts into the project, which we believe will translate into obtaining new, attractive customers. The major benefits for industrial plants to implement Plasma technology system are economical. Savings are achieved primarily through increasing the efficiency of machines, equipment and production lines; extending the periods between repairs or reducing the costs of purchase of spare parts.
PLASMA SYSTEM Co (www.plasmasystem.pl)
as an independent company has existed since 2004. They implement innovative technologies in engineering topcoats used in many industries. Plasma is a leading company in high-tech welding, laser hardening and thermal spraying. It has a fully robotised production lines, equipped with high power lasers. The company headquarters and its production facilities are located in Siemianowice Slaskie. The company employs over 100 people, of which nearly 40% are engineers.
Avallon MBO FUND II (www.Avallon.pl) Plasma SYSTEM Co is the seventh investment of the Fund , which was established in December 2012 and specialises in transactions carried out jointly with managers. Its previous transactions have been: Novo Tech Ltd – manufacturer of products based on polymer technology; EMERSON DC- leader of promotional and transactional mailing; Zaberd Co – Polish market leader in road maintenance; MPS International Ltd – manufacturer of cosmetics, packaging and cleaning products; ORE Co – leader in the field of corporate buyers; and Velvet CARE Ltd – manufacturer of hygienic products for everyday use.
Avallon is a pioneer in management buyouts in Poland working in this area since 2001. Investors of the Fund are international financial institutions, such as European Bank for Reconstruction and Development, and the funds managed by the Swiss company Akina Partners. The Fund invests in various industries, mainly in companies with a turnover of PLN 50 to 250 million. In September 2015, Avallon was nominated a candidate in a category of the Rising Star of the fourth edition of Private Equity Exchange Awards for Central and Eastern Europe and Russia. The contest gala and announcing of the winners will take place in Paris on 3rd December 2015.