Buy-out firms embrace Germany—and vice versa

KKR IS ON a roll in Germany. On July 4th the American private-equity firm announced its takeover of a majority stake in heidelpay, a payment-processing firm. A day later Axel Springer, a giant publisher, said that more than 20% of its shareholders had agreed to sell their shares to KKR, bringing a full takeover by the Americans a step closer. Last year KKR opened an office in Frankfurt. Its European boss is Johannes Huth, a German. Since it entered the country in 1999 it has spent $5bn on buying more than 20 German companies, including Arago, a maker of artificial-intelligence software, Hensoldt, a defence-electronics business, and GfK, a research firm.

For private-equity companies this marks a turnaround no less profound than those they try to engineer at the businesses they acquire. In 2005 Franz Müntefering, then boss of the Social Democratic Party, described them as “swarms of locusts that fall on companies, stripping them bare before moving on”. These days the locusts are increasingly seen as a force to help companies improve performance (not strip assets) and create jobs (rather than destroying them). KKR says it has increased the workforce of its German, Austrian and Swiss companies by an average of 8% from the moment of purchase to divestment.

Indeed, rather than fend off KKR’s advances, Mathias Döpfner, Axel...

via Business Feeds

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