EQT spurs the growth of global market leader Ottobock
Näder family establishes long-term partnership with renowned investor
DUDERSTADT/STOCKHOLM. The Swedish private equity firm EQT is acquiring a 20 per cent stake in Otto Bock HealthCare GmbH, becoming the first shareholder outside the family in the company’s 98-year history of the German hidden champion in technical orthopaedics. Both sides signed the investment agreement at the headquarters in Duderstadt on June 24. 80 per cent remains in the hands of Otto Bock Holding GmbH & Co. KG, which is wholly owned by the Näder family. EQT will have a representative on Ottobock’s ten-member Supervisory Board that is being formed.
“We combine the dynamics of Ottobock as a global market leader in Orthotics and Prosthetics (O&P) and of EQT as a leading European investor in the medical technology sector with comprehensive expertise and strong ties to the Swedish Wallenberg family of entrepreneurs. Together we are using our know-how in the sector and private equity competence to become even more agile, to adapt to the future even more quickly, to continue strengthening our leading position in the digital transformation and to realise hidden performance and profitability potential,” said Professor Hans Georg Näder, President of Otto Bock Holding GmbH & Co. KG. “EQT is spurring our growth and helping us get ready for a potential IPO in all respects. Together we will generate added value for users, employees and shareholders. As a blue chip in German Mittelstand we act as a blue print for German Familienunternehmen (SME).”
EQT convincingly asserted itself against a number of other international top investors in a diligent tendering procedure conducted by the investment bank J.P. Morgan. “We are impressed by Ottobock’s long heritage of innovation and its ability to define the landscape of mobility solutions in the area of wearable home rehabilitation in regarding the growing market of human bionics,” said Marcus Brennecke from EQT, who is based in Munich and responsible for the regions of Germany, Austria and Switzerland (DACH). “Based on EQT’s deep healthcare expertise, we are one of the most active investors in the sector and we will be a strategic partner to Professor Näder, the management and the company. We look forward to working together and contributing to the continued success of Ottobock.”
EQT was founded in 1994 by Conni Jonsson and Investor AB (founded by the Swedish Wallenberg family of entrepreneurs a hundred years ago). Investor AB holds 19 per cent of the company. EQT pursues a sustainable and long-term investment strategy and has raised 24 funds totalling EUR 37 billion include more than 400 institutional investors such as insurance companies, pension funds, foundations and family offices from around the world. Medical technology is an important industry focus. EQT participates specifically in family companies and is expanding its presence in German-speaking regions. EQT's current healthcare investments include, among others, the leading hearing aid specialist Sivantos (formerly Siemens Audiology Solutions) and the Italian manufacturer of endoprosthesis Lima. EQT has also a track record of several successful IPOs in Germany, such as Holzminden based aroma and fragrance specialist Symrise (listed in 2006) and Tognum, formerly MTU Friedrichshafen (listed in 2007).
Within the framework of the “Roadmap 22” strategy, Ottobock is pursuing ambitious growth targets in the business areas of Prosthetics, Orthotics, Human Mobility and MedicalCare. The company is highly profitable and has more than 7,000 employees. It generated sales of EUR 884.5 million in 2016.
“As the market leader, we drive change in our industry. Digital and disruptive have become positive elements of our DNA. The Ottobock Group continues to focus on HealthCare and its profitable growth,” said Professor Näder. “I am very pleased to have EQT on board as a partner that shares the values of a family company. The growth opportunities in the new constellation also benefit the employees. We continue pursuing the possibility of an IPO. However, such a step will come later rather than sooner thanks to the partnership with EQT.”
The proceeds of the transaction will largely benefit the company, serving to finance further growth, for instance through acquisitions such as the recent takeovers of bebionic and BionX. “EQT’s extremely positive assessment confirmed the company’s value at EUR 3.15 billion,” Näder said. The agreement remains subject to approval by the cartel authorities. Closing is planned for the second half of the year.
“The transaction is an exciting step made by a globally leading German Mid Cap” said Dorothee Blessing, Regional Head for the investment bank J.P. Morgan in the DACH region. “The partnership with EQT brings many opportunities for the further development of Ottobock.”
Finally Hans Georg Näder thanked “all investors who dealt with us intensively over the past months, especially our new partner EQT, the team around Marcus Brennecke and Johannes Reichel, the investment bankers at J.P. Morgan investment bankers at J.P. Morgan under the leadership of Dorothee Blessing, Michele Iozzolino and Juha Anjala and the legal advisors Freshfields Bruckhaus Deringer lead by Prof. Dr. Christoph Seibt and Dr. Nils Koffka and Hengeler Mueller lead by Prof. Dr. Hans-Jörg Ziegenhain und Dr. Steffen Oppenländer.” He also expressed his appreciation for the management team and the Ottobock employees who did an outstanding job presenting the company. Näder: “Now we embark into the future together, full steam ahead.”