Stromag was a European market leader for mechanical drive technology – industrial clutches, brakes and limit switches – with more than 900 employees worldwide. Stromag engineers developed individual drivetrain solutions for wind power plants, crane construction, agricultural machinery and road construction equipment. In the field of industrial disc brakes, the subsidiary SIME-Stromag was the global leader.

The acquisition

At the time of acquisition, Stromag was owned by 15 passive shareholders; management held no shares in the company. Through one of NEXX’s deal scouts, contact was established with an independent board member. NEXX gained direct access to management, secured exclusivity and was able to close the transaction swiftly.

Investment Rationale

Stromag operated in a growing market driven by investments in plants and equipment. Solid historical growth (around 10% p.a.) and stable margins provided the foundation. A strong global customer base of leading machine manufacturers offered levers to grow market share in core segments (crane construction, wind energy, off-road vehicles) and in growth regions (North America, China, India).

Implementation of the growth concept

During the holding period, subsidiaries were established in India and China in order to address the growth regions directly. Stromag focused on high-margin niches such as high-torque solutions for energy and mining applications as well as holding and emergency brakes for wind power plants. In the field of electric drives, a clutch solution for golf carts was developed. The product portfolio was overall more sharply focused on higher-margin segments.

Exit

The exit was completed in September 2011 to GKN plc, a British listed industrial group focused on drive and powder metallurgy technologies.