Australia's Allegro completes sale of Vulcanite Holdings

The Australian special situations investor did not disclose the size of the transaction, merely stating that it had sold a 93% interest in Vulcanite to Continental's ContiTech division. Allegro bought the company from Chess Industries, a sheet metal and equipment supplier to the infrastructure, transportation and industrial sectors.

Founded in 1946, Vulcanite's core business is producing primary and secondary suspension components for rail companies and rail equipment manufacturers. Customers include three of the world's four leading railway rolling stock builders. The company - which has around 60 employees - also supplies the construction, marine and heavy materials industries, with its products put to use in pile driving machinery, crushers and dock fenders.

Allegro claims to have helped Vulcanite survive a severe market downturn in 2014 and deliver sales and profitability growth. Initiatives during the holding period included brand building and developing a more global customer base as well as the establishment of a manufacturing facility in Malaysia. Sales have increased by more than 50% since 2011.

ContiTech is the world's largest specialist for rubber and plastics technology in the non-tire rubber sector. It manufactures components and systems for machine and plant engineering, mining and the automotive industry. Claus-Peter Spille, head of ContiTech's air spring systems business, said in a statement that the acquisition opens up additional growth potential in the railway business.

ContiTech generated sales of almost EUR5.4 billion ($5.9 billion) in 2015 and currently employs 43,000 people across 44 countries.

Allegro focuses on turning around distressed assets, having begun as an advisor before taking over as GP of a fund previously managed by ABN AMRO. Last year it closed its second fund at A$180 million ($139 million). Investments from this fund include New Zealand-based flooring retailer Carpet Court and Australia's Great Southern Rail. Also last year, Allegro exited industrial services provider TSC Group to multinational energy player Engie.

Grant Thornton and Minter Ellison advised Allegro on the Vulcanite sale.

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• Topics
• Australasia
• Industrials
• Trade sale
• Allegro Funds
• Exit
• Australia
• manufacturing