EQT and Ottobock Initiate Share Sale

2023-06-06
3 min read

Frankfurter Allgemeine Zeitung / Klaus Max Smolka

30 Per Cent of Medical Technology Provider Ottobock Up for Sale. According to F.A.Z. Information, JP Morgan Bank Has Now Sent Information Dossiers to Potential Interested Parties. The possible deal involves a 30 per cent package in the prosthetics manufacturer: namely, the 20 per cent stake that the current minority shareholder EQT wishes to pass on - and additionally, the 10 per cent package that the founder’s grandson and Chairman of the Supervisory Board, Hans Georg Näder, intends to sell.

Näder recently made public a decision to relinquish 10 per cent of his stake on Ottobock in an interview with the Frankfurter Allgemeine Sonntagszeitung (F.A.S.).

According to several sources in the financial industry, the combined package is now being offered in the information memoranda. In the interview, Näder had already attached a price tag to the shares: “When EQT invested in our company, it was valued at approximately 3 billion euros; to date, we have at least doubled the company’s value.”

Billion-Euro Deal

The Scandinavian EQT, represented here in a leading role by their partner Marcus Brennecke, paid 630 million euros for the 20 per cent in 2017, corresponding to a total valuation of 3.15 billion euros. They were the first non-family shareholder in the medical technology manufacturer founded in 1919 by Otto Bock in Berlin.

Last year, Ottobock increased its revenue by one-eighth to around 1.3 billion euros and its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) by 2 per cent to 238 million euros.

According to EQT, the company has made more than 30 acquisitions since the investor’s entry. Brennecke would, by his own account, remain invested even longer - but private equity funds typically have a limited term. While dedicated continuation funds could be set up for cases such like this, investors in the current EQT fund are reportedly not interested in pursuing this option.

EQT and JP Morgan declined to comment.

Ottobock had been slated to go public last year, but the plan was shelved, like a number of other IPO plans, after the start of the Ukraine war.

Investment bankers say the IPO likely remains on the agenda for the medium term. In that case, the new minority owner would be an interim solution. Equally, however, a longer-term fund could emerge victorious - a pension or sovereign wealth fund, a family wealth manager, or a combination thereof.

At Ottobock, the search for a new co-owner has begun: According to F.A.Z. information, investment bank JP Morgan has just sent information memoranda to potential interested parties, i.e., the detailed documents to parties presumed to have a serious interest.