Triumph-Adler AG – Recapitalisation
http://www.triumph-adler.com
Business Case:
In mid 2004, DAM Capital was approached by Triumph-Adler AG, a 116-year old publicly-traded conglomerate based in Nürnberg, Germany, which had developed a number of well-known products (including Triumph motorcycles and Triumph/ Adler typewriters) over the course of its 116 year history. The Company was in the process of executing a transformation into a focused document image-processing and IT specialist. While the management had executed on its core strategy by divesting several non-core businesses and adding a strategic equity partner (their largest supplier, Kyocera Mita Japan), the Company required additional capital to complete its restructuring. Traditional lenders at this point proved to be reluctant to cover the entire financing requirements and the capital markets were hesitating to inject this vast amount of fresh equity.
Tailoring the Solution:
The DAM Capital group quickly determined that the Company's strategy was working and could be fully realised with more time. The DAM Capital group's investment professionals structured an innovative €30 million solution, which included one of the first "standby mezzanine" debt facilities in Europe of €5 million to complete their planned operational restructuring. The DAM Capital group provided 50% of the debt and found another investor to take the remainder.
Accelerating Results:
Triumph-Adler AG completed its transformation with DAM Capital group's flexible financing, ultimately doubling EBITDA over a three year period. Once performance improved, it was then able to reduce its cost of capital by refinancing the €30 million of debt arranged by the DAM Capital group with less expensive senior debt. The result was that Triumph-Adler's share price increased more than 140% over the life of DAM Capital's investment. In October 2007 Triumph-Adler AG was awarded the title of Restructuring Turnaround Company of the Year in Germany in 2007 by BDO Deutsche Warentreuhand AG.