Halder | Ownership Succession and Growth for MidCaps

Halder | Ownership Succession and Growth for MidCaps

VAG-Armaturen GmbH

Business
Valves and fittings for the utility industry
Sales
€131 million (2010)
Holding
2008, MBO
Sale
2011

What does it take to turn an SME-sized company into an international market leader? New ideas and room to move will provide good starting points. VAG’s founding year – 1872 – implies much in the way of tradition and hints at established market positions. At the beginning of the twenty first century the company, then part of IWKA group, nevertheless needed a shake-up. As a specialist for valves and fittings used in water and waste infrastructure systems, VAG was mainly active in Western European markets. In 2001, new CEO Robert Fellner-Feldegg and his management team made a fresh start to put the company on a path towards profitable growth: Cost reduction from moving production abroad, an optimized product offering and a new distribution system worked well, providing IWKA with an opportunity to put VAG up for an initial MBO in 2004.

In 2008, Halder took over as lead investor, buying a majority holding with partners AlpInvest and GIMV. The successful management team remained in place and now including the heads of key production sites in China and the Czech Republic, holds 14%.

Business opportunities in water and waste management largely arise from infrastructure investment by emerging countries in Asia, South America and the Middle East. VAG had planned  to succeed against larger competitors in these regions by leveraging its low-cost production, extending the sales force and applying a problem-solving approach - backed by more investment in production and logistics capabilities.

The investment programme included modernisation of plants in Germany and the Czech Republic, but its main focus was on establishing production facilities in China and India to cover rising demand from expanding and upgrading water infrastructure in Asia. China has become VAG’s largest international market and in 2009, a second local plant was opened to produce large-scale valves. Overall capital spending since 2008 was €38 million. For the twelve months ended June 30, VAG had sales of approximately €140 million, with the share of international revenue rising from 56% in 2007 to 65%. Total headcount was about 1,200, of which international staff represented 75%. Halder sold its shareholding to Rexnord LLC, Wisconsin, USA, in 2011.

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