Chinese GP buys Germany's Cordenka for $274m

The fund was announced during British Prime Minister Teresa May's visit to Shanghai in February. It was one of several projects intended to demonstrate Sino-UK cooperation in the financial services sector. Headquartered in Shanghai and London, the RMB3 billion ($480 million) fund is intended to partner with private capital in acquiring European medical, chemical, and environmental protection businesses.

The purchase of Cordenka was also backed by the likes of Shanghai Electric, Shanghai MG Investment, ABA Chemicals, Bank of Shanghai and an international investment arm of Agricultural Bank of China. Goldman Sachs and Barings provided acquisition finance.

The seller is Chequers Capital, which acquired the business through a management buyout in 2011 from CVC Capital Partners, Akzo Nobel, and Acordis-Management. Chequers is a Europe-based private equity firm with EUR2 billion under management. It claims that Cordenka's turnover at acquisition was EUR100-200 million.

The company is a global leader in the production of industrial rayon, a high-tenacity, cellulose-based manmade fiber used in high-performance tires. Cordenka, which has 650 employees, claims to cover more than 50% of global technical rayon demand. It has an annual capacity of 32,000 metric tons of industrial rayon yarns and 18,000 tons of dipped cord fabric capacity for the tire industry. Customers include Aston Martin, Audi, BMW, Chevrolet, Mercedes, Tesla, and Volvo.

"BMC is a new private equity fund specifically established to acquire exceptional European businesses like Cordenka with growth opportunities in China. Together with Karl Hammer [Cordenka's CEO] and his team, we have developed an action plan to support Cordenka through our network and access in Shanghai. We look forward to developing our partnership over the coming years," BMC said in a statement.

BMC, which stands for Beautiful Mind Capital, is the manager of BMC Europe Fund I. It was established by three former investment bankers from Credit Suisse, Vivian Xinya Wang, Sebastian Grigg, and Vicky Jialu Wang. At the fund launch, it was also announced that a second BMC vehicle would be established later in 2018 with a view to investing a further RMB3 billion in Europe.

There is considerable Chinese demand for European industrial technology, healthcare and biotech assets, and consumer brands. Several companies have made acquisitions of companies in the Mittelstand, a catch-all for precision manufacturing players in German-speaking Europe. However, regulatory scrutiny of Chinese investments in the region is growing.

Germany has been the prime mover in this area. Earlier this year, it directed a state-owned bank to acquire a stake in 50Hertz Transmission in order to thwart State Grid Corp. of China and vetoed Yantai Taihai Group's proposed acquisition of Leifeld Metal Spinning, a manufacturer of high-strength metals for the aerospace and nuclear industries.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Europe
• Buyouts
• Industrials
• China
• manufacturing
• BMC