THC Fund Sells Transsystem
Oriens, an industrial holding focusing on private equity investments in the CEE region, has acquired Transsystem, a leading Polish provider of automated material handling systems for factories and warehouses, from the private equity fund THC.
Source: https://tarheelcap.com/
August 1, 2023
Established in 1991, Transsystem employs 400 people, including 60 engineers, designers, and programmers. The company specializes in designing and manufacturing automated material handling systems in three business segments: tire manufacturing, intralogistics, and contract manufacturing. Leveraging its know-how, Transsystem provides solutions to well-known factories and warehouses, including Goodyear, Continental, Michelin, Bridgestone, Auto Partner, Dremex, and Van Pur.
Oriens, which owns six groups of companies in the Czech Republic, Hungary, and Germany acquired Transsystem from THC.
- Oriens believes that Transsystem has not only a strong track record of delivering innovative material handling and intralogistics solutions to its customers, but also an excellent potential to become a platform for future growth and development.
The THC Fund invested in Transsystem in 2014, acquiring a financially struggling company, its technologies, and its brand from the court-appointed administrator. The Fund acquired nearly 80% of the company's shares and, together with supporting individuals involved in the transaction, established a new development strategy and implemented a comprehensive restructuring program.
- We fixed the mistakes and restructured the processes that led the company to its previous downfall. We implemented cost monitoring tools, improved financial liquidity and project profitability, and recruited a new key management team. Additionally, based on the Quick Response Manufacturing strategy, the implemented management system significantly reduced project implementation time and improved internal communication. The company's offer was rebuilt, changing its positioning in the market from a manufacturer of steel structures to a provider of its own comprehensive logistics automation solutions in the tire and intralogistics segments - says Andrzej Różycki, managing partner at Tar Heel Capital, a firm advising THC funds.
This change in strategy placed the company at the intersection of several global macro-trends, including the growing demand for automated warehousing due to e-commerce development, the need for efficient and precise internal logistics integrated with robotic production and IT systems within Industry 4.0 concept, and the rise of electromobility.
Since 2014, the company has significantly increased the scale of its operations. From an unprofitable and small-scale enterprise, it has transformed into a healthy and rapidly growing company, generating 158 million PLN in revenue and 23 million PLN in EBITDA profit in 2022. The sale transaction of Transsystem to Oriens provided the THC fund with a six-fold return on its invested capital.
- Since the company's acquisition by the fund, we have achieved a five-fold increase in revenue and a six-fold increase in EBITDA. I want to thank the management and employees of Transsystem for their outstanding achievements and wish them further success with the new owner - adds Andrzej Różycki.
Transsystem was part of the THC II fund portfolio, which invested over 50 million EUR in nine companies along with additional debt financing of approximately 100 million EUR. The diagnostic laboratories network TOMMA was sold in 2019 to PZU Zdrowie, and Dobrowolski, a manufacturer of special vehicles, became part of the industry investor R&G from Germany in 2021. Rockfin, a global leader in auxiliary systems for the energy and manufacturing sectors, was acquired by the Czech investment company Jet Investment in 2022. The remaining companies in the THC II portfolio are Mera Systemy, ELPLC, Flavourtec, Aludesign, and TMR.
In 2019, THC III fund was launched, with the aim of investing 100 million EUR in Polish companies. The portfolio includes Suret, Cad/Cam Solution, Radpol, SmakMak, and the dental group Dentity. Companies from the THC portfolio employ nearly 2,500 people in Poland and achieve a combined turnover of 1.6 billion PLN.
EY M&A team was a sell-side transaction advisor in the process while Andrzej Chrzanowski supported the fund on the legal side. On the other side of the transaction, Oriens was advised by Hogan Lovells lawyers and Deloitte financial advisors.
Background
Tar Heel Capital is one of the leading Polish private equity firms. For more than twenty years we have helped companies become market leaders and offered above average rates of return to investors. We specialize in acquisitions, debt-raising, IPOs and sale transactions from various sectors. Tar Heel Capital has a deep, experienced and proven team of investment professionals.
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