EQT wants to get out of the prosthesis manufacturer Ottobock

Prostheses at the Rehacare trade fair

Ottobock is considered a pioneer and innovator in this area.

(Photo: dpa)

Frankfurt According to financial sources, the private equity company EQT is preparing to sell its stake in Ottobock. The investor, together with majority owner Hans Georg Näder, has commissioned the investment bank JP Morgan to look for a buyer for the 20 percent EQT stake, which should begin in the first quarter. If everything goes smoothly, a deal could be signed as early as summer or fall.

The prosthesis manufacturer Ottobock could be valued at five to six billion euros, according to people familiar with the matter. Näder supports EQT’s plans, but will not sell. Ottobock, EQT and JP Morgan all declined to comment.

In May of this year, Ottobock announced that it wanted to go public in 2022. “We are on course with the planning for this step,” Kathrin Dahnke, CFO at the time, told Handelsblatt. The company is ready for the capital market. A little later, however, Näder conceded the plan and exchanged Dahnke and CEO Philipp Schulte-Noelle. According to financial circles, the latter was considered a capable communicator, especially for the exchange with potential IPO investors, the current CEO Oliver Jakobi, on the other hand, has strengths in topics such as raising prices and reducing costs.

Poor stock market environment makes IPO unlikely

Due to the volatile markets, there were no IPOs in 2022, with the exception of the Volkswagen subsidiary Porsche. Porsche is considered a special case, since the families behind VW were not out to maximize Porsche’s value. The deal was therefore able to succeed even in shaky markets. Investment bankers do not expect any recovery in the capital market environment in the short term, and the route to an IPO is likely to be closed to many candidates for the foreseeable future.

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The family-run company Ottobock had brought EQT, which had joined almost six years ago, into the group of shareholders in order to make the company fit for the stock market. The measures initiated by EQT included the professionalization of corporate management.

>> Read also: Sluggish IPO hits investment banks hard

In addition to Näder and EQT partner Marcus Brennecke, the Board of Directors now includes experienced industrial managers such as Stefan Heidenreich (Beiersdorf), Joachim Kreuzburg (Sartorius) and Michael Kaschke (Zeiss). In addition, EQT helped Ottobock streamline structures and buy around 30 smaller companies, such as Vigo and Mollii Suit.

Since the prospects for a quick revival of the stock market plans are currently poor, according to financial circles, EQT is now looking to sell the shares. Other financial investors, sovereign wealth funds and family offices have deposited their interests with the company in recent weeks. The IPO remains an option, it said.

Ottobock manufactures prostheses, orthoses, wheelchairs and exoskeletons. On the one hand, the company benefits from long-term trends such as the aging society, as well as from short-term effects such as the Ukraine war.

When EQT entered the company in 2016, Ottobock generated sales of EUR 880 million and an operating result (EBITDA) of EUR 140 million. For 2022, the company expects sales of a good 1.3 billion and an Ebitda of 260 million.

Ottobock has identified several future fields

In the past, Näder had stated that an IPO could make it easier for Ottobock to develop new business areas. The focus was on system solutions that make work easier, for example in construction, on the assembly line or in logistics.

Another growth area are so-called neuro-ortheses, with which older people, but also stroke patients, can move better. “This era will come,” Näder had said. The new technologies are very expensive. But the need for post-stroke care alone is immense: 600,000 people suffer this fate in Germany alone every year.

Ottobock grew big with the production of prostheses with which war invalids could walk again. The company now also develops and produces products that construction workers or logisticians can use to lift heavier loads.

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