ISOLITE was a leading supplier of high-temperature insulation systems for the aviation and turbo machinery industries, the automotive industry and large engine manufacturing. ISOLITE’s products increased the efficiency and resistance to wear of systems exposed to operating temperatures between 400 and 1,400 degrees Celsius and were protected by proprietary patents.
The acquisition
Equita Holding (Fund III) acquired ISOLITE in 2010 together with management. The previous owners – who had acquired ISOLITE in 2005 via an MBO – were looking for a new active co-shareholder to grow the business further. UniCredit Corporates & Markets ran the process; despite broader competition, NEXX prevailed thanks to its industrial background, the strong rapport with management and the suitability of the proposed transaction structure.
Investment Rationale
ISOLITE addressed an attractive market segment with sustainable tailwinds: rising requirements for engine efficiency, stricter emission regulations and the trend towards quieter engines in the premium segment. The company had a highly differentiated product offering with proprietary R&D capabilities and IP-protected technology. Geographical growth potential was identified in particular in the United States.
Implementation of the growth concept
ISOLITE was repositioned from a manufacturer of prototypes and niche products towards a supplier for high-volume series applications (including with a leading German automotive manufacturer). Geographical expansion was achieved through a subsidiary in Greenville (USA) in 2012, a joint venture with the Korean foundry MMT in 2015 and the acquisition of GENTECH Preform & Fibre in 2016, successfully entering the South African market. With ISOLITE Noise Control, the industrial acoustic insulation market was opened up in 2014 and quickly gained blue-chip customers. The industrial segment for large combustion engines was further diversified, with new customers including leading manufacturers in commercial vehicles, agricultural machinery and industrial engines.
Exit
The exit was completed in April 2017 to Hitachi Chemical Co., Ltd., a subsidiary of the Japanese Hitachi Group and a global manufacturer of advanced materials (today Resonac).
www.isolite.de
