Target Information

Deutsche Beteiligungs AG (DBAG) is making a strategic investment in Dantherm Group, a leading provider of heating, cooling, drying, ventilation, and air cleaning (HVAC) technology based in Denmark. Established in 1958, Dantherm has evolved into a key player in the HVAC market, with operations spanning ten European countries. The company focuses on delivering innovative and energy-efficient solutions across various applications, including portable dehumidifiers, mobile cooling systems, and residential ventilation products. Dantherm's management team will retain a stake in the company following this investment.

Industry Overview

The HVAC industry is experiencing steady growth across Europe, with an annual growth rate estimated between four and six percent. This growth is largely attributed to increasing awareness of climate change, heightened consumer demand for wellness-related products, and the adoption of stricter regulations aimed at improving energy efficiency. Dantherm Group has positioned itself to capitalize on these trends, consistently expanding its product offerings and market presence.

In recent years, Dantherm has reported remarkable revenue growth, achieving approximately 30 percent annually, with sales reaching 148 million euros in 2020. This surge follows Dantherm's acquisition by Swedish private equity firm Procuritas in 2016, which enabled the company to broaden its footprint through close to 20 targeted acquisitions. With a sales distribution mainly in the DACH region, Dantherm's products are also present in over 50 countries worldwide, showcasing its significant reach in the HVAC sector.

The growing emphasis on climate control and energy-efficient solutions places Dantherm in a favorable position within the market. The company operates three production facilities located in Denmark, Italy, and the UK, employing approximately 600 personnel to support its operations and innovation strategy. As the HVAC market continues to evolve, the integration of newly acquired companies presents further opportunities for expansion and enhancement of Dantherm's product range.

Rationale Behind the Deal

This investment marks the fourth acquisition by DBAG Fund VIII, as they pursue a targeted buy-and-build strategy focused on medium-sized companies across Europe. DBAG aims to leverage Dantherm's strong market position and ongoing momentum to facilitate further organic growth while also exploring potential acquisitions to enhance the company's product portfolio and regional coverage. As the market remains fragmented, DBAG sees the opportunity to drive additional value creation by integrating acquisitions and capitalizing on Dantherm's growth trajectory.

Investor Information

Deutsche Beteiligungs AG (DBAG) is a prominent investment firm specializing in medium-sized companies across Germany, Austria, and Switzerland. With a investor-centric approach, DBAG Fund VIII focuses on nurturing growth through strategic investments and the implementation of operational improvements. The fund aims to deliver sustained value creation through partnerships with portfolio companies, supporting them in aligning their strategies for long-term success.

DBAG has demonstrated a robust track record of successful investments and value realization in the private equity sector. By investing approximately 28 million euros in Dantherm, DBAG reinforces its commitment to helping the company navigate the rapidly evolving HVAC landscape while prioritizing sustainable growth and innovative solutions.

View of Dealert

In evaluating this investment opportunity, it appears that DBAG's acquisition of a stake in Dantherm Group could be a strategically sound move. The HVAC sector is on an upward trajectory, driven by pressing issues such as climate control and energy efficiency, which align well with Dantherm's product offerings. The company's impressive revenue growth and market position provide a solid foundation for potential returns on investment.

Furthermore, DBAG's intention to support Dantherm's organic growth and investment strategy could enhance the company's competitive edge in the fragmented HVAC market. By utilizing acquisition-driven growth initiatives, DBAG is likely to increase Dantherm's market share and diversify its product range, further bolstering its appeal to consumers.

Moreover, the existing partnership with Dantherm's experienced management team is crucial. With a strong understanding of the HVAC industry and established networks, they are well-positioned to execute growth strategies alongside DBAG, ensuring continued innovation and market responsiveness.

Overall, DBAG's investment in Dantherm Group represents a robust opportunity in a growing market. Provided that the partnership is leveraged effectively, the investment could yield positive results and contribute to Dantherm's ongoing evolution as a market leader in HVAC solutions.

View Original Article