Transnorm was a specialist manufacturer of high-performance modules for unit load, container and box conveyor systems as well as for parcel and airport baggage handling systems. With its belt curves in particular, the company held a leading market position. Transnorm’s components were used globally at airports in baggage handling systems, in large parcel distribution centres and in the mail order and printing industries.

The acquisition

The previous owners Nord Holding and management had acquired Transnorm out of a distressed situation and decided to divest within a short period of time. KPMG Corporate Finance ran an auction process in 2007; management chose NEXX thanks to a fast due diligence approach and a strong industrial fit.

Investment Rationale

The market segment was supported by several structural drivers: growing passenger numbers and new airport capacity, rising parcel volumes driven by B2C e-commerce and an increasing degree of automation in logistics. Transnorm differentiated itself through reliability, speed and a low total cost of ownership versus its main competitor. The recurring spare parts business (around one third of revenues) provided a stable earnings base.

Implementation of the growth concept

During the holding period, the dependency on the airport segment was reduced through a stronger focus on the parcel and distribution sectors, balancing the revenue mix. The high-margin spare parts business was deliberately expanded and grew by 28% since 2006. With new products such as Line Splitter, Smart Sort and VertiSwitch, the product breadth was enlarged and the dependency on the core belt curve product reduced. A sales office in Shanghai opened up the growing Chinese express parcel market with a leading local logistics player, and a partnership with a globally leading logistics group supported the international business.

Exit

The exit was completed in December 2014 to IK Investment Partners (IK VII Fund), a pan-European mid-market private equity investor.