Barat Carbide developed and produced specially hardened components made of tungsten carbide and steel composite materials for high-wear industrial applications, as well as tools for mining and road construction. As global market leader in its industry with production sites in Germany, South Africa and China and a sales office in the USA, the company achieved sales of € 76m with 660 employees in 2006.

The acquisition

Barat Carbide and Barat Ceramics were non-core divisions of Longyear Holdings Inc., a portfolio company of Advent International, which were to be divested ahead of an IPO. Lazard managed the process, which targeted an acquirer with carve-out experience and the ability to take over both units. Equita Holding (Fund III) prevailed thanks to its carve-out expertise and industrial orientation.

Investment Rationale

Barat Carbide served attractive end-markets in infrastructure (roads, tunnels, mining) and energy (coal mining). A broad blue-chip customer base of leading international mining, construction and industrial groups, combined with a technology leadership position in high-resistance tungsten carbide products, provided the foundation. As a stand-alone carve-out, the platform could be managed independently for the first time, opening up internationalisation potential.

Implementation of the growth concept

Shortly after acquisition, sales were specifically reinforced in key markets (China, India, North America, South Africa) in order to consolidate the global market position and actively leverage the premium product quality and blue-chip customer base for further growth

Exit

The exit was completed in October 2007 to Element Six Abrasives S.A. (part of the De Beers Group), a globally leading manufacturer of synthetic diamond and hard metal tools.