Hillhouse Capital acquires Gimborn from Penta Investments

Penta Investments is selling Gimborn Holding GmbH, which develops, manufactures and markets premium cat and dog snacks & treats and clumping cat litter, to Hillhouse Capital Management, a long-term equities investor, having significant investments in Asia. Financial terms of the transaction were not disclosed.

“Following the highly successful restructuring and development of Gimborn, we are pleased to have found the ideal new owner for the company. Under the experienced management of Hillhouse, Gimborn can accelerate its planned expansion into Asia. This presents a significant opportunity for Gimborn, allowing the business to continue its success story and to sell and market its products on a global basis,” said Dr. Thomas von Werner, Managing Director of Penta in Germany.

In 2008, Penta Investments acquired the business and four years later subsequently separated the Gimborn pet shop retail activities with more than 120 stores in the CEE region from its core business, which were sold to a third party later on. In the context of this strategic move, Michael Baumgärtner was appointed as CEO of Gimborn. Given his vast experience in the fast-moving consumer goods sector, he initiated a fundamental strategic realignment of the business, focussed on substantially reducing complexity, a strong innovation push and restructuring the entire company. Gimborn generates approximately 86 % of its revenues in its four key markets Germany, the Netherlands, Italy and Russia.

“Gimborn is now ideally positioned for dynamic, profitable and cash efficient growth. Therefore, we strongly welcome the arrival of a new strong and long-term oriented investor,” added Michael Baumgärtner, CEO of Gimborn.

Restructuring of Gimborn

Following the change in top management a new strategy was formulated that contained inter alia a portfolio and channel review, product design quick fixes and comprehensive process optimizations. A number of products were identified as non-core and subsequently phased out. Business processes were streamlined and a route to new product development and channel exploration initiated, leading to an attractive innovation pipeline and build-up of attractive business segments.

Between 2013 and 2015, Gimborn’s core business grew 3.8 % annually as a result of new product designs, strong growth through the penetration of online channels and new product introductions. EBITDA increased significantly by 40%, mainly related to the reorganizations and portfolio changes.

Advisors

Ernst & Young served as financial and tax advisor to Penta. McDermott Will and Emery served as legal advisors, while Angermann M&A International served as M&A advisors.

About Penta

Penta is a Central European investment group established in 1994. It operates mainly in healthcare, financial services, manufacturing, retail, media and real estate development. Its portfolio companies provide jobs to more than 41,000 people and reported assets of EUR 9 billion in 2017. Penta operates in more than 10 European countries and has offices in Prague, Bratislava and Warsaw.

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