Canada Pension Plan Investment Board is putting $1.2-billion into a European ceramics company in a deal that allows two other major Canadian pension plans to sell their stakes in the company.
CPPIB said Tuesday it will team up with private-equity firm BC Partners to buy CeramTec GmbH, a maker of ceramic products for a wide range of uses, from hip implants for humans and dogs to “piezo-ceramic” sensors that help your car back up safely. CPPIB will pay €800-million ($1.2-billion) and get 50 per cent of the company.
The deal allows Ontario Teachers’ Pension Plan and Public Sector Pension Investment Board (PSP) to exit their investments in CeramTec. The two teamed up with BC Partners in March, 2018, to buy the company from its previous owner, European private-equity firm Cinven Ltd. for undisclosed terms. Tuesday’s transaction will see BC Partners transfer its stake from one of its funds to another.
CeramTec has 21 production sites, more than 3,500 employees across 11 countries, and more than 20,000 products in two business lines, medical and industrial.
In 2019, the company reported €620.4-million in revenue, with about 60 per cent coming from the industrial division. It reported a net loss of €339.3-million, driven by a large impairment charge. Earnings before interest, taxes, depreciation and amortization, or EBITDA, was €222.7-million.
CPPIB said that since the March, 2018, BC Partners-led purchase, CeramTec has “significantly extended its product development pipeline,” improved its operations and accelerated its medical expansion, particularly through the acquisition of Dentalpoint AG, a maker of ceramic dental implants.
CPPIB said its investment will allow CeramTec to continue to expand in the medical technology field, both through new-product development and more acquisitions. In a statement, Hafiz Lalani, the head of Europe for CPPIB’s Direct Private Equity division, called CeramTec’s business an “attractive global market,” and said company management and BC Partners bring “deep sector knowledge.”
“We believe the transaction is a great outcome for all parties,” Teachers spokesman Dan Madge said.
PSP declined to comment on the transaction.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.