- Sale covers all Powertech power supply systems activities
- Consistent alignment with Knorr-Bremse’s core competencies
- EBIT margin expected to improve by 50 basis points following a nonrecurring charge in 2019
Knorr-Bremse, the global market leader for braking systems and a leading supplier of other subsystems for rail and commercial vehicles, today signed an agreement regarding the sale of its Powertech business unit to Munich-based Radial Capital Partners (RCP). Closing will take place immediately after the agreement is signed.
“Within the framework of the ongoing alignment of our business activities with our core competencies as a key supplier of subsystems, components and services for the rail vehicle industry, we have decided to sell the Powertech business unit. As it turns out, there are fewer synergies between the business unit and the other activities of Knorr-Bremse than originally expected,” says Dr. Jürgen Wilder, Member of the Executive Board of Knorr-Bremse AG and responsible for the Rail Vehicle Systems division. “In RCP we have found the ideal owner to focus Powertech on its own core business and attain its full potential outside the Group.”
Ralph Heuwing, Member of the Executive Board of Knorr-Bremse AG and CFO, added: “Our regular review of performance and strategic fit within our portfolio showed that the sale of Powertech is the best solution. While this will cause a one-off restructuring charge this year, this step will lead to a sustained improvement of 50 basis points in the operating EBIT margin of our continued operations, as early as 2020.”
The transaction comprises the complete takeover of the global business activities of Powertech and of its entire workforce. Allowing for required capital resources, deconsolidation effects as well as further transaction-related one-off expenses, a restructuring expense in the financial result of just under EUR 80 mill. in total will be charged.
With 526 employees, the Powertech business unit manufactures power supply systems for rail vehicles and industrial applications. In 2018 the business unit reported revenues of approximately EUR 90 million and a result (EBIT) of EUR -19 million. The product portfolio comprises converters and electrical equipment for rail vehicles, as well as for power generation and energy storage systems, a wide range of industrial applications, and highly dynamic engine and transmission test benches. The business unit includes three companies in Germany – Knorr-Bremse Powertech GmbH, Knorr-Bremse Powertech GmbH & Co. KG and Knorr-Bremse Powertech Verwaltungs GmbH – as well as Knorr-Bremse Powertech Corp. in the United States and other business activities in Australia, Spain and the People’s Republic of China.
RCP specializes in investing in medium-sized industrial companies that are in turnaround and special situations, and in particular in peripheral activities of corporate groups that offer potential for operational value creation. In managing its investments, RCP focuses on the long-term and sustainable development of its portfolio companies, while also taking environmental and social criteria into account. With its extensive and long-term investment and management experience, the RCP management team is also committed to the operational support and development of the companies in the group.
Knorr-Bremse (ISIN: DE000KBX1006, Ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems. Knorr- Bremse’s products make a decisive contribution to greater safety and energy efficiency on rail tracks and roads around the world. About 28,500 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2018, Knorr-Bremse’s two divisions together generated revenues of EUR 6.6 billion. For more than 114 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. Knorr-Bremse is one of Germany’s most successful industrial companies and profits from the key global megatrends: Urbanization, ecoefficiency, digitization and automated driving.
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