Deal focus: AGIC boosts Gimatic’s global automation ambitions

The benefits of robotic workers on factory assembly lines are familiar by now: automated employees can work more cheaply than humans, are more reliable, and can do work that is too dangerous for flesh-and-blood workers. But even as advances in their controlling computers make robots theoretically capable of ever more complex tasks, they remain limited by practical constraints. Most notably, human hands still far outstrip the versatility of robotic manipulators.

The shortcomings of current robotic manipulators created an opportunity for Italy's Gimatic, which develops and manufactures end-of-arm tools for robots in industrial and other applications. AGIC Capital, which recently acquired Gimatic in a deal that values the company at more than EUR100 million ($112.5 million), believes the company is on track to becoming an industry innovation leader.

"There are quite a few industrial applications - automotive and plastic handling, for example - but the company also sees very attractive opportunities in the automation of manufacturing processes in the pharma industry," says Heiko von Dewitz, managing partner in AGIC's Munich office. "You also have packaging, which is very attractive, and the whole electronics production value chain."

AGIC, which invests in European companies with a view to exploiting opportunities in China's market, identified Gimatic as a potential investee last year - even before it reached a $550 million first close on its debut fund. The firm favors small and midcap companies, with annual revenues of up to $200 million, innovative technological approaches, and strong product portfolios and pipelines that can benefit from its connections and expertise in China.

"Gimatic's revenue share right now from Asia, including China, is in the single digits, so there's a lot of headroom for growth," says von Dewitz. "For a small company, getting a foot into the room and scaling the business in China is a challenging task, and this is where we help them with our network and our resources."

Gimatic was being targeted by both strategic interests and private equity investors at the time, but through a series of meetings with the founder, Giuseppe Bellandi, and investor Xenon Private Equity, AGIC convinced them that it was the best choice to take over. Both Bellandi and Xenon will re-invest in Gimatic, taking significant minority stakes.

AGIC's solo involvement in the Gimatic deal contrasts with its most recent investment in January, when it partnered with China National Chemical Corporation and Guoxin International Investment Corp. to buy KraussMaffei, a German manufacturer of machinery used to make plastics and rubber, for $1 billion. The GP still considers the consortium approach an important part of its toolbox for larger deals, but for opportunities like Gimatic that fall within its financial sweet spot, going solo is the best way to set AGIC apart from its rivals.

"The private equity market in Europe is competitive, that's no secret, but the AGIC investment model of facilitating growth and internationalization, especially the bridge to China, is something that resonates very well," von Dewitz says. "We think it's a very compelling approach and compelling investment model for private equity these days."

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• Topics
• Greater China
• Europe
• Industrials
• Buyouts
• Technology
• manufacturing
• China
• AGIC Capital