One Equity Partners plans to grow its latest acquisition – polymers, composites and precision metal parts provider Clayens – through M&A deals across the world, managing director Konstantin Ryzhkov told PE Hub Europe.
In late July, OEP announced it had agreed to acquire Clayens Group from a group of investors led by Siparex, which was selling its majority stake. Siparex, its co-investors and the management team will reinvest in Clayens as minority partners.
Headquartered in Genas, France, Clayens’ capabilities include thermoplastics, thermoset injection, metalloplastics and precision metal machining and engineering.
“We are continuing to find attractive acquisition opportunities within the industrials sector,” Ryzhkov said. “The pandemic and resultant supply-chain disruptions have highlighted vulnerabilities and caused many companies to re-locate their supply chains more locally.”
A growing number of companies are reshoring supply chains from China back to Europe and the US, according to Ryzhkov. “We believe that outsourced contract manufacturers with facilities strategically located near its customers, such as Clayens, are poised to benefit from this tailwind.”
With Siparex’s backing, Clayens completed four significant acquisitions. By applying its “global approach”, OEP plans to boost the growth trajectory. “We seek to grow the company through similar size combinations internationally,” Ryzhkov said. “In addition to the growth through combination, OEP always pays attention to organic growth opportunities, adding specific product and service offerings to strengthen the partnership with its customers.”
OEP plans to build on what Siparex started to further internationalise Clayens. The firm is looking to strengthen Clayens’ presence in North America, Southeast Asia and Northern Europe to “create a balanced customer portfolio and revenue stream from all major geographies”, Ryzhkov said.
Looking further ahead, Ryzhkov believes Clayens could attract significant demand from strategic and financial investors at the exit. “We also believe that at the right size the company can become an attractive IPO candidate,” he added.
Opportunities ahead despite slowdown
Clayens is the latest OEP investment in outsourced services, contract manufacturing and onshoring trends. The firm has several examples within its portfolio of manufacturing companies that service and provide products to global blue-chip customers and have what Ryzhkov describes as “sticky long-term relationships”.
With interest rates rising, there could be a slowdown in M&A more generally. According to Ryzhkov, this is especially likely for highly levered LBOs. But even in this environment, OEP is finding attractive buying opportunities, said Ryzhkov. “Given our disciplined purchase multiples and low reliance on leverage, we believe our strategy is more resilient to headwinds other private equity firms may be facing.”